EXHIBIT 4.1
EXECUTION COPY
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SYNOVUS FINANCIAL CORP.
and
MELLON INVESTOR SERVICES LLC
as
Rights Agent
---------------------
Amended and Restated Rights Agreement
Dated as of May 14, 2002
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TABLE OF CONTENTS
Page
Section
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Section 1. Certain Definitions..................................................................... 1
Section 2. Appointment of Rights Agent............................................................. 8
Section 3. Issuance of Right Certificates.......................................................... 9
Section 4. Form of Right Certificates.............................................................. 11
Section 5. Countersignature and Registration....................................................... 13
Section 6. Transfer, Split Up, Combination and Exchange of Right Certificates; Mutilated,
Destroyed, Lost or Stolen Right Certificates........................................................ 14
Section 7. Exercise of Rights; Purchase Price; Expiration Date of Rights........................... 15
Section 8. Cancellation and Destruction of Right Certificates...................................... 18
Section 9. Reservation and Availability of Shares of Common Stock.................................. 18
Section 10. Common Stock Record Date................................................................ 21
Section 11. Adjustments to Number and Kind of Shares, Number of Rights or Purchase Price............ 21
Section 12. Certification of Adjustments........................................................... 35
Section 13. Consolidation, Merger or Sale or Transfer of Assets or Earning Power................... 36
Section 14. Fractional Rights and Fractional Shares................................................ 42
Section 15. Rights of Action....................................................................... 43
Section 16. Agreement of Right Holders.............................................................. 44
Section 17. Right Certificate Holder Not Deemed a Shareholder....................................... 45
Section 18. Concerning the Rights Agent............................................................. 46
Section 19. Merger or Consolidation or Change of Name of Rights Agent............................... 47
Section 20. Duties of Rights Agent.................................................................. 48
Section 21. Change of Rights Agent.................................................................. 52
Section 22. Issuance of New Right Certificates...................................................... 53
Section 23. Redemption.............................................................................. 54
Section 24. Exchange................................................................................ 56
Section 25. Notice of Proposed Actions.............................................................. 57
Section 26. Notices................................................................................. 59
Section 27. Supplements and Amendments.............................................................. 60
Section 28. Determinations and Actions by the Board................................................. 61
Section 29. Successors.............................................................................. 62
Section 30. Benefits of this Rights Agreement....................................................... 62
Section 31. Governing Law........................................................................... 62
Section 32. Counterparts............................................................................ 63
Section 33. Descriptive Headings.................................................................... 63
Section 34. Severability............................................................................ 63
Exhibit A -- Form of Right Certificate
Exhibit B -- Form of Summary of Rights
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RIGHTS AGREEMENT
This amended and restated agreement ("Rights Agreement"), dated as of May
14, 2002, between SYNOVUS FINANCIAL CORP., a Georgia corporation (the "Company")
and MELLON INVESTOR SERVICES LLC, a New Jersey limited liability company (the
"Rights Agent").
W I T N E S E T H:
WHEREAS, the Board of Directors of the Company on April 27, 1999 (i)
authorized the issuance and declared a dividend of one right (a "Right") for
each share of the common stock, par value $1.00 per share ("Common Stock"), of
the Company outstanding as of the close of business on May 4, 1999 (the "Record
Date"), each Right representing the right to purchase one share of Common Stock
of the Company upon the terms and subject to the conditions hereafter set forth,
and (ii) further authorized the issuance of one Right with respect to each share
of Common Stock of the Company that shall become outstanding between May 4,
1999, and the earliest of the Distribution Date, the Expiration Date or the
Final Expiration Date (each such term as defined herein); and
WHEREAS, the Board of Directors does not believe that any Person (as
defined herein) is as of the date hereof the Beneficial Owner (as defined
herein) of 15% or more of the outstanding Common Stock;
NOW, THEREFORE, in consideration of the premises and the mutual
agreements herein set forth, the parties hereby agree as follows:
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms shall have the meanings indicated:
a. "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates (as such term is
hereinafter defined) and Associates (as such term is hereinafter defined) of
such Person, shall be the Beneficial Owner (as such term is hereinafter defined)
of 15% or more of the outstanding Common Stock; provided, however, that (i) the
term "Acquiring Person" shall not include an Exempt Person (as such term is
hereinafter defined) or a "Permitted Holder" (as such term is hereinafter
defined), (ii) a Person shall not be deemed to have become an Acquiring Person
for any purpose of this Agreement if the Board of Directors in its good faith
judgment determines that a Person has inadvertently become the Beneficial Owner
of 15% or more of the outstanding Common Stock of the Company (or in the case of
a Permitted Holder, has inadvertently acquired additional shares of Common Stock
of the Company so that it is no longer a Permitted Holder) and within ten days
after the date upon which the Company shall first become aware of the occurrence
of such an event, the Board of Directors in its sole discretion provides such
Person with a thirty day period to divest a sufficient number of shares so that
such Person no longer is the Beneficial Owner of 15% or more of the outstanding
Common Stock of the Company (or in the case of a Permitted Holder, to divest all
shares of Common Stock of the Company which prevent such Person from being a
Permitted Holder), and such Person has so divested such shares of Common Stock
of the Company at the end of any such thirty day period and has not acquired any
additional shares of Common Stock of the Company prior to the end of such thirty
day period; and (iii) shares of Common Stock Beneficially Owned by the Company
or any Subsidiary of the Company shall not be considered outstanding for
purposes of calculating any Person's percentage ownership of the outstanding
Common Stock of the Company.
b. "Adjustment Shares" shall have the meaning set forth in Section
11(a)(ii) hereof.
c. "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act of 1934, as amended ("Exchange Act"), as in effect
on the date of this Agreement.
d. A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "Beneficially Own", any securities:
i. which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
ii. which such Person or any of such Person's Affiliates or
Associates, directly or indirectly has (A) the right to acquire
(whether such right is exercisable immediately or only after the
passage of time) pursuant to any agreement, arrangement or
understanding (whether or not in writing), or upon the exercise of
conversion rights, exchange rights, rights (other than these
Rights), warrants or options, or otherwise; provided, however, that
a Person shall not be deemed the "Beneficial Owner" of, or to
"Beneficially Own", securities tendered pursuant to a tender or
exchange offer made by or on behalf of such Person or any of such
Person's Affiliates or Associates pursuant to, and in accordance
with the applicable rules and regulations promulgated under the
Exchange Act, until such tendered securities are accepted for
purchase or exchange; or (B) the right to vote pursuant to any
agreement, arrangement or understanding (whether or not in writing);
provided, however, that a Person shall not be deemed the "Beneficial
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Owner" of, or to "Beneficially Own", any securities if the
agreement, arrangement or understanding to vote such security (1)
arises solely from a revocable proxy or consent given to such Person
in response to a public proxy or consent solicitation made pursuant
to, and in accordance with, the applicable rules and regulations of
the Exchange Act and (2) is not also then reportable by such Person
on Schedule 13D or Schedule 13G under the Exchange Act (or any
comparable or successor report); or
iii. which are beneficially owned, directly or indirectly, by
any other Person with which such Person or any of such Person's
Affiliates or Associates has any agreement, arrangement or
understanding (whether or not in writing) for the purpose of
acquiring, holding, voting (except as described in the proviso to
clause (B) of subparagraph (ii) of this paragraph (d)) or disposing
of any securities of the Company; provided, however, that nothing in
this paragraph (d) shall cause a Person engaged in business as an
underwriter of securities to be the Beneficial Owner of, or to
Beneficially Own, any securities acquired through such Person's
participation in good faith in a firm commitment underwriting until
the expiration of forty days after the date of such acquisition.
e. "Business Day" shall mean any day other than a Saturday, Sunday,
or a day on which banking institutions in New Jersey are authorized or obligated
by law or executive order to close.
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f. "Close of Business" on any given date shall mean 5:00 P.M.,
Eastern Standard Time, on such date; provided, however, that if such date is not
a Business Day it shall mean 5:00 P.M., Eastern Standard Time, on the next
succeeding Business Day.
g. "Common Stock" when used with reference to the Company shall mean
the common stock (presently $1.00 par value per share) of the Company. "Common
Stock" when used with reference to any Person other than the Company shall mean
the capital stock or other equity interests with the greatest per share or per
unit voting power of such other Person or, if such Person is a Subsidiary of or
is controlled by another Person, the Person or Persons which ultimately controls
such first-mentioned Person.
h. "Common Stock Equivalents" shall have the meaning set forth in
Section 11(a)(iii) hereof.
i. "Current Market Price" shall have the meaning set forth in
Section 11(d) hereof.
j. "Current Value" shall have the meaning set forth in Section
11(a)(iii) hereof.
k. "Distribution Date" shall have the meaning set forth in Section
3(a) hereof.
l. "Equivalent Common Stock" shall have the meaning set forth in
Section 11(b) hereof.
m. "Exchange Act" shall have the meaning set forth in Section l(c)
hereof.
n. "Exchange Ratio" shall have the meaning set forth in Section
24(a) hereof.
o. "Exempt Person" shall mean:
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(i) the Company, any Subsidiary of the Company, any employee
benefit plan or employee stock plan of the Company or of any Subsidiary of
the Company, or any Person or entity organized, appointed, established or
holding Common Stock for or pursuant to the terms of any such plan;
(ii) (a) any shareholder who is a descendant of D. Abbott
Turner (the "Turner Family"), (b) any shareholder who is an Affiliate or
Associate of the Turner Family, or (c) any Person who would otherwise
become an Acquiring Person as a result of the acquisition of Common Stock
or a Beneficial Interest in Common Stock from one or more members of the
Turner Family (or from any Affiliate or Associate of the Turner Family) by
way of gift, devise, descent or distribution; provided, however, that no
Person described in the foregoing clauses (a), (b) or (c) shall be an
Exempt Person if such Person (together with all Affiliates and Associates
of such Person) is the Beneficial Owner of more than 30% of the
outstanding Common Stock; and
(iii) any Person who as of the date hereof was the Beneficial
Owner of 15% or more of the outstanding Common Stock; provided, however,
that such Person shall not be an Exempt Person if subsequent to the date
hereof such Person becomes the Beneficial Owner of any additional shares
of Common Stock.
p. "Expiration Date" shall have the meaning set forth in Section
7(a) hereof.
q. "Final Expiration Date" shall have the meaning set forth in
Section 7(a) hereof.
r. "NYSE" shall have the meaning set forth in Section 9(b) hereof.
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s. "Permitted Holder" shall mean any Person who would otherwise
become an Acquiring Person solely by virtue of a reduction in the number of
total outstanding shares of Common Stock; provided, however, that such Person
shall not be a Permitted Holder if, subsequent to such reduction, such Person
shall become the Beneficial Owner of any additional shares of Common Stock.
t. "Person" shall mean any individual, firm, corporation,
partnership, joint venture, limited liability company, association or other
entity, and shall include any successor (by merger or otherwise) of such entity.
u. "Principal Party" shall have the meaning set forth in Section
13(b) hereof.
v. "Purchase Price" shall have the meaning set forth in Section 4(a)
hereof.
w. "Record Date" shall have the meaning set forth in the recitals
clause at the beginning of this Rights Agreement.
x. "Redemption Price" shall have the meaning set forth in Section
23(a) hereof.
y. "Right Certificate" shall have the meaning set forth in Section
3(a) hereof.
z. "Section 11(a)(ii) Event" shall mean an event described in
Section 11(a)(ii) hereof.
aa. "Section 11(a)(ii) Trigger Date" shall have the meaning set
forth in Section 11(a)(iii) hereof.
bb. "Section 13 Event" shall mean any event described in clause (x),
(y) or (z) of Section 13(a) hereof.
cc. "Securities Act" shall mean the Securities Act of 1933, as
amended.
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dd. "Stock Acquisition Date" shall mean the first date of a public
announcement (which, for purposes of this definition, shall include, without
limitation, a report filed pursuant to Section 13(d) or (g) under the Exchange
Act) by the Company or an Acquiring Person that an Acquiring Person has become
such; provided, however, that if such Person is determined not to have become an
Acquiring Person pursuant to Section 1(a), then no Stock Acquisition Date shall
be deemed to have occurred.
ee. "Subsidiary" of a Person shall mean any corporation or other
entity of which securities or other ownership interests having ordinary voting
power sufficient to elect a majority of the board of directors or other persons
performing similar functions are Beneficially Owned, directly or indirectly, by
such Person.
ff. "Substitution Period" shall have the meaning set forth in
Section 11(a)(iii) hereof.
gg. "Summary of Rights" shall have the meaning set forth in Section
3(b) hereof.
hh. "Trading Day" shall have the meaning set forth in Section 11(d)
hereof.
ii. "Triggering Event" shall mean any event described in Section
11(a)(ii) or Section 13 hereof.
Section 2. Appointment of Rights Agent. The Company hereby appoints
the Rights Agent to act as agent for the Company in accordance with the terms
and conditions hereof, and the Rights Agent hereby accepts such appointment. The
Company may from time to time appoint such co-Rights Agents as it may deem
necessary or desirable, upon ten (10) days' prior notice to the Rights Agent.
The Rights Agent shall have no duty to supervise, and shall in
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no event be liable for, the acts or omissions of any such co-Rights Agent. If
the Company appoints one or more co-Rights Agents, the respective duties of the
Rights Agent and any co-Rights Agents shall be as the Company shall determine.
Section 3. Issuance of Right Certificates.
a. Until the earlier of (i) the Close of Business on the tenth day
after the Stock Acquisition Date or (ii) the Close of Business on the tenth
Business Day (or such later date as may be determined by action of the Board of
Directors prior to such time as any Person becomes an Acquiring Person) after
the date of the commencement by any Person (other than an Exempt Person) of, or
the first public announcement of the intent of any Person (other than an Exempt
Person) to commence, a tender or exchange offer upon the successful consummation
of which such Person, together with its Affiliates and Associates, would be the
Beneficial owner of 15% or more of the outstanding Common Stock (irrespective of
whether any shares are actually purchased pursuant to such offer) (the earlier
of such dates described in clauses (i) and (ii) being referred to herein as the
"Distribution Date"), (x) the Rights will be evidenced (subject to the
provisions of Section 3(c) hereof) by the certificates for the Common Stock
registered in the names of the holders of the Common Stock (which certificates
for Common Stock shall be deemed also to be certificates for Rights) and not by
separate Right certificates, and (y) each Right (and the right to receive
separate Right Certificates) will be transferable only in connection with the
transfer of a share (subject to adjustment as hereinafter provided) of Common
Stock. As soon as practicable after the Distribution Date, the Company will
promptly notify the Rights Agent thereof and will prepare and execute, and the
Rights Agent will send, by first-class, insured, postage prepaid mail, to each
record holder of the Common Stock as of the Close of
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Business on the Distribution Date, as shown by the records of the Company, at
the address of such holder shown on such records, a Right Certificate in
substantially the form of Exhibit A hereto ("Right Certificate") evidencing one
Right for each share of Common Stock so held, subject to adjustment as provided
herein. As of and after the Distribution Date, the Rights will be evidenced
solely by such Right Certificates and will be transferable separately from the
Common Stock.
b. As promptly as practicable following the Record Date, the Company
will send a copy of a Summary of Rights to Purchase Common Stock, substantially
in the form attached hereto as Exhibit B ("Summary of Rights"), by first-class,
postage prepaid mail, to each record holder of Common Stock as of the Close of
Business on the Record Date at the address of such holder shown on the records
of the Company.
c. With respect to certificates for Common Stock outstanding as of
the Record Date until the Distribution Date (or, if earlier, the Expiration Date
or the Final Expiration Date), the Rights will be evidenced by certificates for
Common Stock registered in the names of the holders thereof together with a copy
of the Summary of Rights. Until the Distribution Date (or, if earlier, the
Expiration Date or Final Expiration Date), the surrender for transfer of any
certificate for Common Stock outstanding on the Record Date with or without a
copy of the Summary of Rights attached thereto, shall also constitute the
surrender for transfer of the Rights associated with the Common Stock
represented thereby.
d. Certificates issued for Common Stock (including, without
limitation, certificates issued upon transfer or exchange of Common Stock) after
the Record Date, but prior
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to the earliest of the Distribution Date, the Expiration Date or the Final
Expiration Date, shall have impressed on, printed on, written on or otherwise
affixed to them the following legend:
This certificate also evidences and entitles the holder hereof to certain
Rights as set forth in a Rights Agreement between Synovus Financial Corp.
and a Rights Agent, (the "Rights Agreement"), the terms of which are
incorporated herein by reference and a copy of which is on file at the
principal executive office of Synovus Financial Corp. Under certain
circumstances, as set forth in the Rights Agreement, such Rights will be
evidenced by separate certificates and will no longer be evidenced by this
certificate. Synovus Financial Corp. will mail to the holder of this
certificate a copy of the Rights Agreement without charge within five days
after receipt by it of a written request therefor. Under certain
circumstances as provided in the Rights Agreement, Rights issued to or
beneficially owned by Acquiring Persons or their Associates or Affiliates
(as defined in the Rights Agreement) or any subsequent holder of such
Rights may become null and void.
With respect to such certificates containing the foregoing legend, the Rights
associated with the Common Stock represented by such certificates shall, until
the earliest of the Distribution Date, Expiration Date or Final Expiration Date,
be evidenced by such certificates alone, and the surrender for transfer of any
such certificate shall also constitute the surrender for transfer of the Rights
associated with the Common Stock represented thereby. If the Company purchases
or acquires any Common Stock after the Record Date but prior to the Distribution
Date, any Rights associated with such Common Stock shall be deemed canceled and
retired so that the Company shall not be entitled to exercise any Rights
associated with shares of Common Stock which are no longer outstanding.
Section 4. Form of Right Certificates.
a. The Right Certificates (and the forms of election to purchase
shares and of assignment to be printed on the reverse thereof), when, as and if
issued, shall be substantially in the form set forth in Exhibit A hereto and may
have such marks of identification or designation
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and such legends, summaries or endorsements printed thereon as the Company may
deem appropriate (but which do not affect the rights, duties or responsibilities
of the Rights Agent set forth herein) and as are not inconsistent with the
provisions of this Rights Agreement, or as may be required to comply with any
law or with any rule or regulation made pursuant thereto or with any rule or
regulation of any stock exchange or trading system on which the Rights may from
time to time be listed or traded, or to conform to usage. Subject to the
provisions of Sections 11 and 22 hereof, the Right Certificates whenever
distributed, shall be dated as of the Record Date and on their face shall
entitle the holders thereof to purchase one share of Common Stock, or other
securities or property as provided herein, as the same may from time to time be
adjusted as provided herein, at the price of Two Hundred and Twenty Five Dollars
($225.00), as the same may from time to time be adjusted as provided herein (the
"Purchase Price").
b. Notwithstanding any other provision of this Rights Agreement, any
Right Certificate that represents Rights that are or were at any time on or
after the Distribution Date Beneficially Owned by an Acquiring Person or any
Affiliate or Associate thereof (or any transferee of such Rights) shall have
impressed on, printed on, written on or otherwise affixed to it (if the Company
or the Rights Agent has knowledge that such Person is an Acquiring Person or an
Associate or Affiliate thereof or transferee of such Persons or a nominee of any
of the foregoing) the following legend:
The beneficial owner of the Rights represented by this Right Certificate
is an Acquiring Person or an Affiliate or Associate (as defined in the
Rights Agreement) of an Acquiring Person or a subsequent holder of such
Right Certificate beneficially owned by such Persons. Accordingly, under
circumstances specified in the Rights Agreement, this Right Certificate
and the Rights represented hereby will become null and void.
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Notwithstanding the above provision, failure to place such legend on any Right
Certificate representing Rights which are otherwise null and void pursuant to
the terms of this Agreement shall not affect the null and void status of such
Rights.
Section 5. Countersignature and Registration.
a. The Right Certificates shall be executed on behalf of the Company
by its Chief Executive Officer, President or any Vice President, either manually
or by facsimile signature, and shall have affixed thereto the Company's seal or
a facsimile thereof which shall be attested by the Secretary or an Assistant
Secretary of the Company, either manually or by facsimile signature. The Right
Certificates shall be countersigned (which countersignature may be a facsimile)
by the Rights Agent and shall not be valid for any purpose unless so
countersigned. If any officer of the Company who shall have signed any of the
Right Certificates shall cease to be such officer of the Company before
countersignature by the Rights Agent and issuance and delivery by the Company,
such Right Certificates, nevertheless, may be countersigned by the Rights Agent,
and issued and delivered with the same force and effect as though the person who
signed such Right Certificates had not ceased to be such officer of the Company;
and any Right Certificate may be signed on behalf of the Company by any person
who, at the actual date of the execution of such Right Certificate, shall be a
proper officer of the Company to sign such Right Certificate, although at the
date of the execution of this Rights Agreement any such person was not such an
officer.
b. Following the Distribution Date, the Rights Agent will keep or
cause to be kept, at its principal office, books for registration and transfer
of the Right Certificates issued hereunder. Such books shall show the names and
addresses of the respective holders of the
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Right Certificates, the number of Rights evidenced on its face by each of the
Right Certificates, the date of each of the Right Certificates, and the
certificate numbers for each of the Right Certificates.
Section 6. Transfer, Split Up, Combination and Exchange of Right
Certificates; Mutilated, Destroyed, Lost or Stolen Right Certificates.
a. Subject to the provisions of Section 14 hereof, at any time after
the Close of Business on the Distribution Date and at or prior to the Close of
Business on the earlier of the Expiration Date or the Final Expiration Date, any
Right Certificate or Right Certificates may be (a) transferred or (b) split up,
combined or exchanged for another Right Certificate or Right Certificates,
entitling the registered holder to purchase a like number of shares of Common
Stock (or, following a Triggering Event, Common Stock, other securities, cash or
other assets, as the case may be) as the Right Certificate or Right Certificates
surrendered then entitled such holder to purchase. Any registered holder
desiring to transfer any Right Certificate shall surrender the Right Certificate
at the principal office of the Rights Agent with the form of assignment on the
reverse side thereof (or enclose with such Right Certificate a written
instrument of transfer in a form satisfactory to the Company and the Rights
Agent), duly executed by the registered holder thereof or his attorney duly
authorized in writing, and with such signature duly guaranteed. Any registered
holder desiring to split up, combine or exchange any Right Certificate shall
make such request in writing delivered to the Rights Agent, and shall surrender
the Right Certificate or Right Certificates to be split up, combined or
exchanged at the office of the Rights Agent designated for such purposes.
Thereupon the Rights Agent shall countersign (which countersignature may be a
facsimile) and deliver to the person entitled thereto a Right Certificate or
Right Certificates, as the case may be, as so requested. The Company may require
payment of
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a sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer, split up, combination or exchange of Right
Certificates. The Rights Agent shall have no duty or obligation to take any
action under any Section of this Agreement which requires the payment by a
Rights holder of applicable taxes and governmental charges unless and until the
Rights Agent is satisfied that all such taxes and/or charges have been paid.
b. Upon receipt by the Company and the Rights Agent of evidence
reasonably satisfactory to them of the loss, theft, destruction or mutilation of
a Right Certificate, and, in case of loss, theft or destruction, of indemnity or
security satisfactory to them, and, if requested by the Company or the Rights
Agent, reimbursement to the Company and the Rights Agent of all reasonable
expenses incidental thereto, and upon surrender to the Rights Agent and
cancellation of the Right Certificate if mutilated, the Company will execute and
deliver a new Right Certificate of like tenor to the Rights Agent for delivery
to the registered holder in lieu of the Right Certificate so lost, stolen,
destroyed or mutilated.
Section 7. Exercise of Rights; Purchase Price; Expiration Date of
Rights.
a. Subject to Section 7(e), the registered holder of any Right
Certificate may exercise the Rights evidenced thereby (except as otherwise
provided herein, including without limitation, the restrictions on
exercisability set forth in Section 9(b), Section 11(a)(iii) and Section 23(a)),
in whole or in part at any time after the Distribution Date upon surrender of
the Right Certificate, with the form of election to purchase on the reverse side
thereof duly executed (with such signature duly guaranteed), to the Rights Agent
at the principal office of the Rights Agent designated for such purpose together
with payment of the aggregate Purchase Price with respect to each Right
exercised, subject to adjustment as hereinafter provided, at or prior to the
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earliest of (i) the Close of Business on May 4, 2009 ("Final Expiration Date"),
(ii) the time at which the Rights are redeemed as provided in Section 23 hereof
(such date being herein referred to as the "Expiration Date") or (iii) the time
at which such Rights are exchanged as provided in Section 24.
b. The Purchase Price shall initially be $225.00 for each share of
Common Stock issued pursuant to the exercise of a Right. The Purchase Price and
the number of shares of Common Stock or other securities or consideration to be
acquired upon exercise of a Right shall be subject to adjustment from time to
time as provided in Sections 11 and 13 hereof. The Purchase Price shall be
payable in lawful money of the United States of America, in accordance with
Section 7(c) hereof.
c. Except as provided in Section 7(d) hereof, upon receipt of a
Right Certificate representing exercisable rights with the form of election to
purchase duly executed, accompanied by payment of the Purchase Price or so much
thereof as is necessary for the shares or other securities or assets to be
purchased and an amount equal to any applicable transfer tax, by cash, certified
check or official bank check payable to the order of the Company or the Rights
Agent, the Rights Agent subject to Section 20(j) shall thereupon promptly (i)
requisition from any transfer agent of the Common Stock (or make available, if
the Rights Agent is the transfer agent for such shares) certificates for the
number of shares of Common Stock so elected to be purchased and the Company will
comply and hereby authorizes and directs such transfer agent to comply with all
such requests, (ii) when appropriate, requisition from the Company the amount of
cash, if any, to be paid in lieu of issuance of fractional shares in accordance
with Section 14(b) hereof, (iii) promptly after receipt of such Common Stock
certificates cause the same to be
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delivered to or upon the order of the registered holder of such Right
Certificate, registered in such name or names as may be designated by such
holder, and (iv) when appropriate, after receipt promptly deliver such cash to
or upon the order of the registered holder of such Right Certificate; provided,
however, that in the case of a purchase of securities, other than Common Stock,
pursuant to Section 13 hereof, the Rights Agent shall promptly take the
appropriate actions corresponding to the foregoing clauses (i) through (iv). In
the event that the Company is obligated to issue other securities of the
Company, pay cash and/or distribute other property pursuant to Section 11(a)
hereof, the Company will make all arrangements necessary so that such other
securities, cash and/or other property are available for distribution by the
Rights Agent, if and when appropriate.
d. If the registered holder of any Right Certificate shall exercise
less than all the Rights evidenced thereby, a new Right Certificate evidencing
Rights equivalent to the Rights remaining unexercised shall be issued by the
Rights Agent to the registered holder of such Right Certificate or to his duly
authorized assigns, subject to the provisions of Section 14 hereof.
e. Notwithstanding anything in this Agreement to the contrary, any
Rights that are at any time Beneficially Owned by an Acquiring Person or any
Affiliate or Associate of an Acquiring Person shall be null and void and
nontransferable, and any holder of any such Right (including any purported
transferee or subsequent holder) shall not have any right to exercise or
transfer any such Right.
f. Notwithstanding anything in this Agreement to the contrary,
neither the Rights Agent nor the Company shall be obligated to undertake any
action with respect to a registered holder upon the occurrence of any purported
exercise as set forth in this Section 7
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unless such registered holder shall have (i) duly and properly completed and
signed the certificate contained in the form of election to purchase set forth
on the reverse side of the Rights Certificate surrendered for such exercise and
(ii) provided such additional evidence of the identity of the Beneficial Owner
(or former Beneficial Owner) or Affiliates or Associates thereof as the Company
or the Rights Agent shall reasonably request.
Section 8. Cancellation and Destruction of Right Certificates.
All Right Certificates surrendered for the purpose of exercise,
transfer, split up, combination or exchange shall, if surrendered to the Company
or to any of its agents, be delivered to the Rights Agent for cancellation or in
canceled form, or, if surrendered to the Rights Agent, shall be cancelled by it,
and no Right Certificates shall be issued in lieu thereof except as expressly
permitted by any of the provisions of this Rights Agreement. The Company shall
deliver to the Rights Agent for cancellation and retirement, and the Rights
Agent shall so cancel and retire, any Right Certificate purchased or acquired by
the Company otherwise than upon the exercise thereof. The Rights Agent shall
deliver all cancelled Right Certificates to the Company, or shall, at the
written request of the Company, destroy (or cause to be destroyed) such
cancelled Right Certificates, and in such case shall deliver a certificate of
destruction thereof to the Company.
Section 9. Reservation and Availability of Shares of Common Stock.
a. Subject to the Company's rights under Section 11(a)(iii) to
otherwise fulfill its obligations hereunder, the Company covenants and agrees
that at all times it will cause to be reserved and kept available, out of and to
the extent of its authorized and unissued shares of Common Stock not reserved
for another purpose (and, following the occurrence of a Triggering
18
Event, other securities) or shares held in its treasury, the number of shares of
Common Stock (and, following the occurrence of a Triggering Event, other
securities) that, as provided in this Agreement, including Section 11(a)(iii)
hereof, will be sufficient to permit the exercise in full of all outstanding
Rights; provided, however, that the Company shall not be required to reserve and
keep available shares of Common Stock or other securities sufficient to permit
the exercise in full of all outstanding Rights pursuant to the adjustments set
forth in Section 11(a)(ii), Section 11(a)(iii) or Section 13 hereof unless, and
only to the extent that, the Rights become exercisable pursuant to Section 7(a)
following such adjustments.
b. The Company shall (i) use its best efforts to cause, from and
after such time as the Rights become exercisable, the Rights and all shares of
Common Stock (and following the occurrence of a Triggering Event, other
securities) issued or reserved for issuance upon exercise thereof to be listed
by the New York Stock Exchange ("NYSE") or any other national securities
exchange upon notice of issuance upon such exercise and (ii) if then necessary
to permit the offer and issuance of such shares of Common Stock (and, following
the occurrence of a Triggering Event, other securities), register and qualify
such shares of Common Stock (and, following the occurrence of a Triggering
Event, other securities) under the Securities Act and any applicable state
securities or "blue sky" laws (to the extent exemptions therefrom are not
available), cause such registration statement and qualifications to become
effective as soon as practicable after such filing and keep such registration
and qualifications effective until the earlier of the Expiration Date or the
Final Expiration Date of the Rights. The Company may temporarily suspend, for a
period of time not to exceed one hundred and eighty (180) days, the
exercisability of the Rights in order to prepare and file a registration
statement under the
19
Securities Act and permit it to become effective. Upon any such suspension, the
Company shall issue a public announcement stating that the exercisability of the
Rights has been temporarily suspended, as well as a public announcement at such
time as the suspension is no longer in effect. Notwithstanding any provision of
this Agreement to the contrary, the Rights shall not be exercisable in any
jurisdiction unless the requisite qualification in such jurisdiction shall have
been obtained and until a registration statement under the Securities Act (if
required) shall have been declared effective.
c. The Company covenants and agrees that it will take all such
action as may be necessary to insure that all shares of Common Stock (and
following the occurrence of a Triggering Event, other securities) delivered upon
exercise of Rights shall, at the time of delivery of the certificates for such
shares (subject to payment of the Purchase Price in respect thereof), be duly
and validly authorized and issued and fully paid and nonassessable shares in
accordance with applicable law.
d. The Company further covenants and agrees that it will pay when
due and payable any and all taxes and governmental charges which may be payable
in respect of the issuance or delivery of the Right Certificates or of any
shares of Common Stock (or other securities, as the case may be) upon the
exercise of Rights. The Company shall not, however, be required to pay any tax
or charge which may be payable in respect of any transfer or delivery of Right
Certificates to a Person other than, or the issuance or delivery of certificates
for Common Stock (or other securities, as the case
20
may be) upon exercise of Rights in a name other than that of, the registered
holder of the Right Certificate, and the Company shall not be required to issue
or deliver a Right Certificate or certificate for Common Stock (or other
securities, as the case may be) to a person other than such registered holder
until any such tax or charge shall have been paid (any such tax or charge being
payable by the holder of such Right Certificate at the time of surrender) or
until it has been established to the Company's satisfaction that no such tax or
charge is due.
Section 10. Common Stock Record Date. Each Person in whose name any
certificate for shares of Common Stock (or other securities, as the case may be)
is issued upon the exercise of Rights shall for all purposes be deemed to have
become the holder of record of the Common Stock (or other securities, as the
case may be) represented thereby on, and such certificate shall be dated, the
date upon which the Right Certificate evidencing such rights was duly
surrendered and payment of the Purchase Price (and any applicable transfer
taxes) was made; provided, however, that if the date of such surrender and
payment is a date upon which the Common Stock (or other securities, as the case
may be) transfer books of the Company are closed, such Person shall be deemed to
have become the record holder of such shares on, and such certificate shall be
dated, the next succeeding Business Day on which the Common Stock (or other
securities) transfer books of the Company are open.
Section 11. Adjustments to Number and Kind of Shares, Number of
Rights or Purchase Price.
The number and kind of shares subject to purchase upon the exercise
of each Right, the number of Rights outstanding and the Purchase Price are
subject to adjustment from time to time as provided in this Section 11.
a. (i) If the Company shall at any time after the Record Date (A)
declare or pay any dividend on Common Stock payable in shares of Common Stock,
(B) subdivide or split the outstanding shares of Common Stock into a greater
number of shares, (C) combine or
21
consolidate the outstanding shares of Common Stock into a smaller number of
shares or effect a reverse split of the outstanding shares of Common Stock or
(D) issue any shares of its capital stock in a reclassification of the Common
Stock (including any such reclassification in connection with a consolidation or
merger in which the Company is the continuing or surviving corporation), except
as otherwise provided in Section 7(e) or this Section 11(a), the Purchase Price
in effect at the time of the record date for such dividend or of the effective
date of such subdivision, combination or reclassification, and the number and
kind of shares of Common Stock or capital stock, as the case may be, issuable on
such date, shall be proportionately adjusted so that the holder of any Right
exercised after such time shall be entitled to receive, upon payment of the
Purchase Price then in effect, the aggregate number and kind of shares of Common
Stock or capital stock, as the case may be, which, if such Right had been
exercised immediately prior to such date, the holder thereof would have owned
upon such exercise and been entitled to receive by virtue of such dividend,
subdivision, combination or reclassification; provided, however, that in no
event shall the consideration to be paid upon the exercise of one such Right be
less than the per share par value of the shares of capital stock of the Company
issuable upon exercise of the Right. If an event occurs which would require an
adjustment under both this Section 11(a)(i) and Section 11(a)(ii) hereof, the
adjustment provided for in this Section 11(a)(i) shall be in addition to, and
shall be made prior to, any adjustment required pursuant to Section 11(a)(ii).
(ii) If any Person shall become an Acquiring Person (a
"Section 11(a)(ii) Event") other than pursuant to any transaction
set forth in Section 13(a) hereof then, subject to Section 23(a)
hereof, and except as otherwise provided in
22
this Section 11, each holder of a Right (except as provided below
and in Section 7(e)) shall thereafter have a right to receive for
each Right, upon exercise thereof in accordance with the terms of
this Rights Agreement and payment of a price equal to the then
current Purchase Price multiplied by the number of shares of Common
Stock for which a Right was theretofore exercisable, such number of
shares of Common Stock of the Company as shall equal the result
obtained by (x) multiplying the then current Purchase Price by the
number of shares of Common Stock for which a Right was exercisable
immediately prior to the first occurrence of a Section 11(a)(ii)
Event, and (y) dividing that product (such product, following such
first occurrence, shall be referred to as the "Purchase Price" with
respect to each Right for all purposes of this Agreement) by 50% of
the Current Market Price per share of Common Stock on the date of
such first occurrence (such number of shares is herein called the
"Adjustment Shares"); provided that the Purchase Price and the
number of Adjustment Shares shall be further adjusted as provided in
this Agreement to reflect any events occurring after the date of
such first occurrence; and provided, further, that if the
transaction that would otherwise give rise to the foregoing
adjustment is also subject to the provisions of Section 13 hereof,
then only the provisions of Section 13 hereof shall apply and no
adjustment shall be made pursuant to this Section 11(a)(ii).
Notwithstanding the foregoing, upon the occurrence of a Section
11(a)(ii) Event, any Rights that are or were at any time on or after
the earlier of the Stock Acquisition Date or the Distribution Date
Beneficially Owned by the Acquiring Person or any Associate
23
or Affiliate of the Acquiring Person shall become void and any
holder of such Rights shall thereafter have no right to exercise
such Rights under any provision of this Rights Agreement.
(iii) If the number of shares of Common Stock which are authorized
by the Company's articles of incorporation, as amended but not outstanding or
reserved for issuance for purposes other than upon exercise of the Rights is not
sufficient to permit the exercise in full of the Rights in accordance with
Section 11(a)(ii) and the Rights shall become so exercisable, to the extent
permitted by applicable law and any agreements in effect on the date hereof to
which the Company is a party, the Company shall: (A) determine the value of the
Adjustment Shares issuable upon the exercise of a Right (the "Current Value")
and (B) with respect to each Right (subject to Section 7(e)), upon the exercise
of such Right and payment of the applicable Purchase Price, issue shares of
Common Stock to the extent available for the exercise in full of such Right and,
to the extent shares of Common Stock are not so available, make adequate
provision to substitute for the Adjustment Shares not received upon exercise of
such Right (1) cash, (2) a reduction in the Purchase Price, (3) other equity
securities of the Company (including, without limitation, shares, or units of
shares, of preferred stock of the Company which, by virtue of having dividend,
voting and liquidation rights substantially comparable to those of the Common
Stock, are deemed in good faith by the Board of Directors of the Company to have
substantially the same value as shares of Common Stock (such shares or units of
shares of preferred stock are herein called "Common Stock Equivalents")), (4)
debt securities of the Company, (5) other assets, or (6) any combination of the
foregoing, having an aggregate value which, when added to the value of the
shares of Common Stock actually issued upon exercise of such Right, shall have
24
an aggregate value equal to the Current Value (less the amount of any reduction
in Purchase Price), where such aggregate value has been determined in good faith
by the Board of Directors of the Company based upon the advice of a nationally
recognized independent investment banking firm selected in good faith by the
Board of Directors of the Company; provided, however, if the Company shall not
have made adequate provision to deliver value pursuant to clause (B) above
within thirty days following the first occurrence of a Section 11(a)(ii) Event
(the "Section 11(a)(ii) Trigger Date"), then the Company shall be obligated to
deliver, upon the surrender for exercise of a Right and without requiring
payment of the Purchase Price, shares of Common Stock (to the extent available)
and then, if necessary, cash, which shares and/or cash have an aggregate value
equal to the excess of the Current Value over the Purchase Price. If the Board
of Directors of the Company shall determine in good faith that it is likely that
sufficient additional shares of Common Stock could be authorized for issuance
upon exercise in full of the Rights, the thirty day period set forth above may
be extended to the extent necessary, but not more than one hundred and twenty
(120) days after the Section 11(a)(ii) Trigger Date, in order that the Company
may seek shareholder approval for the authorization of such additional shares
(such thirty day period, as it may be extended, is herein called the
"Substitution Period"). To the extent that the Company determines that some
action need be taken pursuant to the first and/or second sentence of this
Section 11(a)(iii), the Company (x) shall provide, subject to Section 7(e) and
the last sentence of Section 11(a)(ii) hereof, that such action shall apply
uniformly to all outstanding Rights, and (y) may suspend the exercisability of
the Rights until the expiration of the Substitution Period in order to seek any
authorization of additional shares and/or to decide the appropriate form of
distribution to be made pursuant to such first sentence and to determine
25
the value thereof. In the event of any such suspension, the Company shall issue
a public announcement stating that the exercisability of the Rights has been
temporarily suspended, as well as a public announcement at such time as the
suspension is no longer in effect (with prompt written notice of each such
announcement to the Rights Agent). For purposes of this Section 11(a)(iii), the
value of the Common Stock shall be the Current Market Price per share of the
Common Stock on the Section 11(a)(ii) Trigger Date and the per share or per unit
value of any "Common Stock Equivalent" shall be deemed to equal the Current
Market Price per share of the Common Stock on such date. The Board of Directors
may, but shall not be required to, establish procedures to allocate the right to
receive Common Stock upon the exercise of the Rights among holders of Rights
pursuant to this Section 11(a)(iii).
b. If the Company shall fix a record date for the issuance of rights
(other than the Rights), options or warrants to all holders of Common Stock
entitling them to subscribe for or purchase (for a period expiring within
forty-five calendar days after such record date) Common Stock, shares having the
same rights, privileges and preferences as the Common Stock ("Equivalent Common
Stock") or securities convertible into Common Stock or Equivalent Common Stock
at a price per share of Common Stock or Equivalent Common Stock (or having a
conversion price per share, if a security convertible into Common Stock or
Equivalent Common Stock) less than the Current Market Price per share of Common
Stock on such record date, the Purchase Price to be in effect after such record
date shall be determined by multiplying the Purchase Price in effect immediately
prior to such record date by a fraction, the numerator of which shall be the
number of shares of Common Stock outstanding on such record date, plus the
number of shares of Common Stock which the aggregate offering price of the total
number of
26
shares of Common Stock and/or Equivalent Common Stock (and/or the aggregate
initial conversion price of the convertible securities so to be offered) would
purchase at such Current Market Price, and the denominator of which shall be the
number of shares of Common Stock outstanding on such record date, plus the
number of additional shares of Common Stock and/or Equivalent Common Stock to be
offered for subscription or purchase (or into which the convertible securities
so to be offered are initially convertible). In case such subscription price may
be paid by delivery of consideration part or all of which may be in a form other
than cash, the value of such non-cash consideration shall be as determined in
good faith by the Board of Directors of the Company, whose determination shall
be described in a statement filed with the Rights Agent and shall be binding on
the Rights Agent and the holders of Rights. Shares of Common Stock owned by or
held for the account of the Company shall not be deemed outstanding for the
purpose of any such computation. Such adjustment shall be made successively
whenever such a record date is fixed, and in the event that such rights or
warrants are not so issued, the Purchase Price shall be adjusted to be the
Purchase Price which would then be in effect if such record date had not been
fixed.
c. If the Company shall fix a record date for a distribution to all
holders of Common Stock (including any such distribution made in connection with
a consolidation or merger in which the Company is the continuing corporation) of
evidences of indebtedness, cash (other than a regular quarterly cash dividend
out of the earnings or retained earnings of the Company), assets (other than a
dividend payable in Common Stock, but including any dividend payable in stock
other than Common Stock) or subscription rights or warrants (excluding those
referred to in Section 11(b) hereof), the Purchase Price to be in effect after
such record date shall
27
be determined by multiplying the Purchase Price in effect immediately prior to
such record date by a fraction, the numerator of which shall be the Current
Market Price per share of Common Stock on such record date, less the fair market
value (as determined in good faith by the Board of Directors of the Company,
whose determination shall be described in a statement filed with the Rights
Agent) of the portion of the cash, assets or evidences of indebtedness so to be
distributed or of such subscription rights or warrants applicable to a share of
Common Stock and the denominator of which shall be such Current Market Price per
share of Common Stock. Such adjustments shall be made successively whenever such
a record date is fixed; and in the event that such distribution is not so made,
the Purchase Price shall be adjusted to be the Purchase Price which would have
been in effect if such record date had not been fixed.
d. For the purpose of any computation hereunder, other than
computations made pursuant to Section 11(a)(iii) hereof, the "Current Market
Price" per share of Common Stock on any date shall be deemed to be the average
of the daily closing prices per share of the Common Stock for the thirty
consecutive Trading Days (as such term is hereinafter defined) immediately prior
to but not including such date, and for purpose of computations made pursuant to
Section 11(a)(iii) hereof, the "Current Market Price" per share of the Common
Stock on any date shall be deemed to be the average of the daily closing prices
per share of the Common Stock for the ten consecutive Trading Days immediately
following but not including such date; provided, however, that in the event that
the Current Market Price per share of the Common Stock is determined during a
period following the announcement by the issuer of the Common Stock of (i) any
dividend or distribution on the Common Stock (other than a regular quarterly
cash dividend and other than the Rights), or (ii) any subdivision, combination
or reclassification
28
of the Common Stock, and prior to the expiration of the requisite thirty Trading
Day or ten Trading Day period, as set forth above, the ex-dividend date for such
dividend or distribution, or the record date for such subdivision, combination
or reclassification occurs, then, and in each such case, the Current Market
Price shall be properly adjusted to take into account ex-dividend trading. The
closing price for each day shall be the last sale price, regular way, or, in
case no such sale takes place on such day, the average of the closing bid and
asked prices, regular way, in either case as reported in the principal
consolidated transaction reporting system with respect to securities listed or
admitted to trading on the NYSE or, if the shares of Common Stock are not listed
or admitted to trading on the NYSE, as reported in the principal consolidated
transaction reporting system with respect to securities listed on the principal
national securities exchange on which the shares of Common Stock are listed or
admitted to trading or, if the shares of Common Stock are not listed or admitted
to trading on any national securities exchange, the last quoted sale price or,
if not so quoted, the average of the high bid and low asked prices in the
over-the-counter market, as reported by the National Association of Securities
Dealers, Inc., Automated Quotations System or such other system then in use, or,
if on any such date the shares of Common Stock are not quoted by any such
organization, the average of the closing bid and asked prices as furnished by a
professional market maker making a market in the Common Stock selected by the
Board of Directors of the Company. If on any such date no market maker is making
a market in the Common Stock, the fair value of such shares on such date as
determined in good faith by the Board of Directors of the Company shall be used.
The term "Trading Day" shall mean a day on which the principal national
securities exchange or national market system on which the shares of Common
Stock are listed or admitted to trading is open for the transaction
29
of business or, if the shares of Common Stock are not listed or admitted to
trading on any national securities exchange or national market system, a
Business Day. If the Common Stock is not publicly held or not so listed or
traded, "Current Market Price" per share shall mean the fair value per share as
determined in good faith by the Board of Directors of the Company whose
determination shall be described in a statement filed with the Rights Agent and
shall be conclusive for all purposes.
e. Anything herein to the contrary notwithstanding, no adjustment in
the Purchase Price shall be required unless such adjustment would require an
increase or decrease of at least one percent in the Purchase Price; provided,
however, that any adjustments which by reason of this Section 11(e) are not
required to be made shall be carried forward and taken into account in any
subsequent adjustment. All calculations under this Section 11 shall be made to
the nearest cent or to the nearest ten-thousandth of a share, as the case may
be. Notwithstanding the first sentence of this Section 11(e), any adjustment
required by this Section 11 shall be made no later than the earlier of (i) three
years from the date of the transaction which mandates such adjustment, or (ii)
the Expiration Date.
f. If as a result of an adjustment made pursuant to Section
11(a)(ii) or Section 13(a) hereof, the holder of any Right thereafter exercised
shall become entitled to receive any shares of capital stock other than Common
Stock, thereafter the number of such other shares so receivable upon exercise of
any Right and the Purchase Price thereof shall be subject to adjustment from
time to time in a manner and on terms as nearly equivalent as practicable to the
provisions with respect to the shares of Common Stock contained in Section
11(a), (b), (c), (e),
30
(g), (h), (i), (j), (k), (l) and (m) hereof, and the provisions of Sections 7,
9, 10, 13 and 14 hereof with respect to the Common Stock shall apply on like
terms to any such other shares.
g. All Rights originally issued by the Company subsequent to any
adjustment made to the Purchase Price hereunder shall evidence the right to
purchase, at the adjusted Purchase Price, the number of shares of Common Stock
purchasable from time to time hereunder upon exercise of the Rights, all subject
to further adjustment as provided herein.
h. Unless the Company shall have exercised its election as provided
in Section 11(i), upon each adjustment of the Purchase Price as a result of the
calculations made in Sections 11(b) and (c), each Right outstanding immediately
prior to the making of such adjustment shall thereafter evidence the right to
purchase, at the adjusted Purchase Price, that number of shares of Common Stock
(calculated to the nearest ten-thousandth) obtained by (i) multiplying (x) the
number of shares covered by a Right immediately prior to this adjustment, by (y)
the Purchase Price in effect immediately prior to such adjustment of the
Purchase Price, and (ii) dividing the product so obtained by the Purchase Price
in effect immediately after such adjustment of the Purchase Price.
i. The Company may elect on or after the date of any adjustment of
the Purchase Price or any adjustment to the number of shares of Common Stock for
which a Right may be exercised, to adjust the number of Rights, in lieu of any
adjustment in the number of shares of Common Stock purchasable upon the exercise
of a Right. Each of the Rights outstanding after the adjustment in the number of
Rights shall be exercisable for the number of shares of Common Stock for which a
Right was exercisable immediately prior to such adjustment. Each Right held of
record prior to such adjustment of the number of Rights shall
31
become that number of Rights (calculated to the nearest ten-thousandth) obtained
by dividing the Purchase Price in effect immediately prior to adjustment of the
Purchase Price by the Purchase Price in effect immediately after adjustment of
the Purchase Price. The Company shall make a public announcement of its election
to adjust the number of Rights, indicating the record date for the adjustment,
and, if known at the time, the amount of the adjustment to be made, and shall
promptly give the Rights Agent a copy of such announcement. This record date may
be the date on which the Purchase Price is adjusted or any day thereafter, but,
if the Right Certificates have been issued, shall be at least ten days later
than the date of the public announcement. If Right Certificates have been
issued, upon each adjustment of the number of Rights pursuant to this Section
11(i), the Company shall, as promptly as practicable, cause to be distributed to
holders of record of Right Certificates on such record date Right Certificates
evidencing, subject to Section 14 hereof, the additional Rights to which such
holders shall be entitled as a result of such adjustment, or, at the option of
the Company, shall cause to be distributed to such holders of record in
substitution and replacement for the Right Certificates held by such holders
prior to the date of adjustment, and upon surrender thereof, if required by the
Company, new Right Certificates evidencing all the Rights to which such holders
shall be entitled after such adjustment. Right Certificates so to be distributed
shall be issued, executed and countersigned in the manner provided for herein
(and may bear, at the option of the Company, the adjusted Purchase Price) and
shall be registered in the names of the holders of record of Right Certificates
on the record date specified in the public announcement.
j. Irrespective of any adjustment or change in the Purchase Price or
the number of shares of Common Stock issuable upon the exercise of the Rights,
the Right
32
Certificates theretofore and thereafter issued may continue to express the
Purchase Price per share and the number of shares which were expressed in the
initial Right Certificates issued hereunder.
k. Before taking any action that would cause an adjustment reducing
the Purchase Price below the then par value of the shares of Common Stock
issuable upon exercise of the Rights, the Company shall take any corporate
action, including using its reasonable best efforts to obtain any required
shareholder approvals, which may, in the opinion of its counsel, be necessary in
order that the Company may validly and legally issue fully paid and
nonassessable shares of Common Stock at such adjusted Purchase Price.
l. In any case in which this Section 11 shall require that an
adjustment in the Purchase Price be made effective as of a record date for a
specified event, the Company may elect to defer (and shall give prompt written
notice of such election to the Rights Agent) until the occurrence of such event
the issuance to the holder of any Right exercised after such record date the
shares of Common Stock and other capital stock or securities of the Company, if
any, issuable upon such exercise over and above the shares of Common Stock and
other capital stock or securities of the Company, if any, issuable upon such
exercise on the basis of the Purchase Price in effect prior to such adjustment;
provided, however, that the Company shall deliver to such holder a due bill or
other appropriate instrument evidencing such holder's right to receive such
additional shares of Common Stock and other capital stock or securities upon the
occurrence of the event requiring such adjustment.
m. Anything in this Section 11 to the contrary notwithstanding, the
Company shall be entitled to make such reductions in the Purchase Price, in
addition to those adjustments
33
expressly required by this Section 11, as and to the extent that in its good
faith judgment the Board of Directors of the Company shall determine to be
advisable in order that any (i) consolidation or subdivision of the Common
Stock, (ii) issuance for cash of any shares of Common Stock at less than the
Current Market Price, (iii) issuance for cash of shares of Common Stock or
securities which by their terms are convertible into or exchangeable for shares
of Common Stock, (iv) stock dividends or (v) issuance of rights, options or
warrants referred to in this Section 11, hereafter made by the Company to
holders of its Common Stock shall not be taxable to such shareholders.
n. The Company covenants and agrees that it shall not, at any time
after the Stock Acquisition Date, (i) consolidate with any other Person (other
than a Subsidiary of the Company in a transaction not prohibited by Section
11(o)), (ii) merge with or into any other Person (other than a Subsidiary of the
Company in a transaction not prohibited by Section 11(o)), or (iii) sell or
transfer (or permit any Subsidiary to sell or transfer), in one transaction or a
series of related transactions not in the ordinary course of the Company's
business, assets, cash flow, or earning power aggregating more than 30% of the
assets, cash flow or earning power of the Company and its Subsidiaries (taken as
a whole) to any other Person or Persons (other than the Company and/or any of
its Subsidiaries in one or more transactions each of which is not prohibited by
Section 11(o)), if (x) at the time of or immediately after such consolidation,
merger or sale there are any rights, warrants or other instruments or securities
outstanding or agreements in effect which would substantially diminish or
otherwise eliminate the benefits intended to be afforded by the Rights or (y)
prior to, simultaneously with or immediately after such consolidation, merger or
sale, the shareholders of the Person who constitutes, or would
34
constitute, the "Principal Party" for purposes of Section 13(a) hereof shall
have received a distribution of Rights previously owned by such Person or any of
its Affiliates and Associates.
o. The Company covenants and agrees that, after the Stock
Acquisition Date, it will not, except as permitted by Section 23 or Section 27
hereof, take (or permit any Subsidiary to take) any action if at the time such
action is taken it is reasonably foreseeable that such action will diminish
substantially or eliminate the benefits intended to be afforded by the Rights.
Section 12. Certification of Adjustments. Whenever an adjustment is
made as provided in Sections 11 and 13 hereof, the Company shall (a) promptly
prepare a certificate setting forth such adjustment and a brief statement of the
facts and computations giving rise to such adjustment, (b) promptly file with
the Rights Agent and with each transfer agent for the Common Stock a copy of
such certificate and (c) mail a brief summary thereof to each holder of a Right
Certificate (or, if prior to the Distribution Date, to each holder of a
certificate representing shares of Common Stock) in accordance with Section 26
hereof. Notwithstanding the foregoing sentence, the failure of the Company to
give such notice shall not affect the validity of or the force or effect of or
the requirement for such adjustment. The Rights Agent shall be fully protected
in relying on any certificate prepared by the Company pursuant to Sections 11
and 13 and on any adjustment therein contained, and shall have no duty with
respect to and shall not be deemed to have knowledge of such adjustment unless
and until it shall have received such certificate. Any adjustment to be made
pursuant to Sections 11 and 13 of this Rights Agreement shall be effective as of
the date of the event giving rise to such adjustment.
35
Section 13. Consolidation, Merger or Sale or Transfer of Assets or
Earning Power.
a. If at any time on or after the Stock Acquisition Date, directly
or indirectly, (x) the Company shall consolidate with, or merge with and into,
any other Person or Persons (other than a Subsidiary of the Company in a
transaction which complies with Section 11(o)) and the Company shall not be the
surviving or continuing corporation of such consolidation or merger, (y) any
Person or Persons (other than a Subsidiary of the Company in a transaction which
complies with Section 11(o)) shall consolidate with, or merge with and into, the
Company, and the Company shall be the continuing or surviving corporation of
such consolidation or merger and, in connection with such consolidation or
merger, all or part of the outstanding shares of Common Stock shall be converted
into or exchanged for stock or other securities of any other Person or of the
Company or cash or any other property, or (z) the Company or one or more of its
Subsidiaries shall sell or otherwise transfer to any other Person or any
Affiliate or Associate of such Person (other than the Company or any Subsidiary
of the Company, in one or more transactions not prohibited by Section 11(o)), in
one transaction or a series of related transactions, not in the ordinary course
of the Company's business, assets, cash flow or earning power aggregating more
than 30% of the assets, cash flow or earning power of the Company and its
Subsidiaries (taken as a whole), then, on the first occurrence of any such
event, proper provision shall be made so that (i) each holder of record of a
Right, except as provided in Section 7(e), shall thereafter have the right to
receive, upon the exercise thereof and payment of the Purchase Price in
accordance with the terms of this Rights Agreement, such number of shares of
validly issued, fully paid and nonassessable and freely tradeable Common Stock
of the Principal Party (as defined in Section 13(b)) not subject to any liens,
encumbrances,
36
rights of first refusal or other adverse claims, as shall be equal to the result
obtained by (1) multiplying the then current Purchase Price by the number of
shares of Common Stock for which a Right was exercisable immediately prior to
the first occurrence of a Section 13 Event (or, if a Section 11(a)(ii) Event has
occurred prior to the first occurrence of a Section 13 Event, multiplying the
Purchase Price in effect immediately prior to the first occurrence of a Section
11(a)(ii) Event by the number of shares of Common Stock for which a Right was
exercisable immediately prior to such first occurrence of a Section 11(a)(ii)
Event) and (2) dividing that product (such product, following the first
occurrence of a Section 13 Event, shall be referred to as the "Purchase Price"
for all purposes of this Agreement) by 50% of the Current Market Price
(determined as provided in Section 11(d) hereof with respect to the Common
Stock) per share of the common stock of such Principal Party on the date of
consummation of such Section 13 Event (or the fair market value on such date of
other securities or property of the Principal Party, as provided for herein);
provided that the Purchase Price and the number of shares of common stock of
such Principal Party issuable upon exercise of each Right shall be further
adjusted as provided in this Agreement to reflect any events occurring after the
date of the first occurrence of a Section 13 Event; (ii) such Principal Party
shall thereafter be liable for, and shall assume, by virtue of such Section 13
Event, all the obligations and duties of the Company pursuant to this Rights
Agreement; (iii) the term "Company" for all purposes of this Rights Agreement
shall thereafter be deemed to refer to such Principal Party, it being
specifically intended that the provisions of Section 11 hereof shall only apply
to such Principal Party following the first occurrence of a Section 13 Event;
and (iv) such Principal Party shall take such steps (including, but not limited
to, the reservation of a sufficient number of shares of
37
its Common Stock in accordance with Section 9 hereof) in connection with the
consummation of any such transaction as may be necessary to assure that the
provisions hereof shall thereafter be applicable, as nearly as reasonably may
be, in relation to its shares of Common Stock thereafter deliverable upon the
exercise of the Rights; provided, however, that, upon the subsequent occurrence
of any merger, consolidation, sale of all or substantially all assets,
recapitalization, reclassification of shares, reorganization or other
extraordinary transaction in respect of such Principal Party, each holder of a
Right shall thereupon be entitled to receive, upon exercise of a Right and
payment of the Purchase Price, such cash, shares, rights, warrants and other
property which such holder would have been entitled to receive had he, at the
time of such transaction, owned the shares of Common Stock of the Principal
Party purchasable upon the exercise of a Right, and such Principal Party shall
take such steps (including, but not limited to, reservation of shares of stock)
as may be necessary to permit the subsequent exercise of the Rights in
accordance with the terms hereof for such cash, shares, rights, warrants and
other property.
b. "Principal Party" shall mean
i. in the case of any transaction described in clause (x) or
(y) of the first sentence of Section 13(a) hereof: (A) the Person
that is the issuer of any securities into which shares of Common
Stock of the Company are converted in such merger or consolidation,
or, if there is more than one such issuer, the issuer of the Common
Stock of which has the greatest market value or (B) if no securities
are so issued, (x) the Person that is the other party to the merger
or consolidation and that survives said merger or consolidation, or,
if there is more than one such Person, the Person the Common Stock
of which has the greatest
38
market value or (y) if the Person that is the other party to the
merger or consolidation does not survive the merger or
consolidation, the Person that does survive the merger or
consolidation (including the Company if it survives); and
ii. in the case of any transaction described in clause (z) of
the first sentence in Section 13(a) hereof, the Person that is the
party receiving the greatest portion of the assets, cash flow or
earning power transferred pursuant to such transaction or
transactions, or, if each Person that is a party to such transaction
or transactions receives the same portion of the assets or earning
power so transferred or if the Person receiving the greatest portion
of the assets or earning power cannot be determined, whichever of
such Persons as is the issuer of Common Stock having the greatest
market value of shares outstanding;
provided, however, that in any such case described in the foregoing (b)(i) or
(b)(ii), if the Common Stock of such Person is not at such time and has not been
continuously over the preceding 12-month period registered under Section 12 of
the Exchange Act, and such Person is a direct or indirect Subsidiary of another
Person the Common Stock of which is and has been so registered, the term
"Principal Party" shall refer to such other Person, or if such Person is a
Subsidiary, directly or indirectly, of more than one Person, the Common Stock of
which are and have been so registered, the term "Principal Party" shall refer to
whichever of such Persons is the issuer of the Common Stock having the greatest
market value of shares outstanding.
c. The Company shall not consummate any consolidation, merger, sale
or transfer referred to in Section 13(a) unless the Principal Party shall have a
sufficient number of authorized shares of its Common Stock which have not been
issued or reserved for issuance to
39
permit the exercise in full of the Rights in accordance with this Section 13 and
unless prior thereto the Company and the Principal Party involved therein shall
have executed and delivered to the Rights Agent an agreement confirming that the
requirements of Sections 13(a) and (b) hereof shall promptly be performed in
accordance with their terms and that such consolidation, merger, sale or
transfer of assets shall not result in a default by the Principal Party under
this Rights Agreement as the same shall have been assumed by the Principal Party
pursuant to Sections 13(a) and (b) hereof and further providing that, as soon as
practicable after executing such agreement pursuant to this Section 13, the
Principal Party will:
i. prepare and file a registration statement under the
Securities Act, if necessary, with respect to the Rights and the
securities purchasable upon exercise of the Rights on an appropriate
form, use its best efforts to cause such registration statement to
become effective as soon as practicable after such filing and use
its best efforts to cause such registration statement to remain
effective (with a prospectus at all times meeting the requirements
of the Securities Act) until the date of expiration of the Rights,
and similarly comply with applicable state securities laws;
ii. use its best efforts, if the Common Stock of the Principal
Party shall become listed on a national securities exchange, to list
(or continue the listing of) the Rights and the securities
purchasable upon exercise of the Rights on such securities exchange
and, if the Common Stock of the Principal Party shall not be listed
on a national securities exchange, to cause the Rights and the
securities purchasable upon exercise of the Rights to be listed by
the NYSE,
40
another national securities exchange or admitted for trading on the
Nasdaq Stock Market;
iii. deliver to holders of the Rights historical financial
statements for the Principal Party which comply in all respects with
the requirements for registration on Form 10 (or any successor form)
under the Exchange Act; and
iv. obtain waivers of any rights of first refusal or
preemptive rights in respect of the shares of Common Stock of the
Principal Party subject to purchase upon exercise of outstanding
Rights.
If any of the transactions described in Section 13(a) hereof shall occur at any
time after the occurrence of a transaction described in Section 11(a)(ii)
hereof, the Rights which have not theretofore been exercised shall thereafter be
exercisable in the manner described in Section 13(a). The provisions of this
Section 13 shall similarly apply to all successive mergers, consolidations,
sales, transfers or other Section 13 Events.
d. Furthermore, if the Principal Party which is to be a party to a
transaction referred to in this Section 13 has a provision in any of its
authorized securities or in its certificate of incorporation, articles of
incorporation, as amended, bylaws, as amended or other instrument governing its
corporate affairs, which provision would have the effect of (i) causing such
Principal Party to issue, in connection with, or as a consequence of, the
consummation of a transaction referred to in this Section 13, shares of Common
Stock of such Principal Party at less than the then Current Market Price per
share (determined pursuant to Section 11(d) hereof) or securities exercisable
for, or convertible into, Common Stock of such Principal Party at less than such
then Current Market Price (other than to holders of Rights pursuant to this
Section 13) or
41
(ii) providing for any special payment, tax or similar provisions in connection
with the issuance of the Common Stock of such Principal Party pursuant to the
provisions of Section 13; then, in such event, the Company hereby agrees with
each holder of Rights that it shall not consummate any such transaction unless
prior thereto the Company and such Principal Party shall have executed and
delivered to the Rights Agent a supplemental agreement providing that the
provision in question of such Principal Party shall have been cancelled, waived
or amended, or that the authorized securities shall be redeemed, so that the
applicable provision will have no effect in connection with, or as a consequence
of, the consummation of the proposed transaction.
Section 14. Fractional Rights and Fractional Shares.
a. The Company shall not be required to issue fractions of Rights or
to distribute Right Certificates which evidence fractional Rights. In lieu of
such fractional Rights, there shall be paid to the holders of record of the
Right Certificates with regard to which such fractional Rights would otherwise
be issuable, an amount in cash equal to the same fraction of the then current
market value of a whole Right. For the purposes of this Section 14(a), the then
current market value of a Right shall be determined in the same manner as the
Current Market Price of a share of Common Stock shall be determined pursuant to
Section 11(d) hereof.
b. The Company shall not be required to issue fractions of shares of
Common Stock upon exercise of the Rights or to distribute certificates which
evidence fractional shares. In lieu of issuing fractions of shares of Common
Stock, there shall be paid to the holders of record of Right Certificates at the
time such Right Certificates are exercised as herein provided an amount in cash
equal to the same fraction of the then current market value of a share of Common
Stock. For purposes of this Section 14(b), the then current market value of a
share
42
of Common Stock shall be the Current Market Price thereof as determined pursuant
to Section 11(d) hereof.
c. The holder of a Right by the acceptance of a Right expressly
waives his right to receive any fractional Right or any fractional shares upon
exercise of a Right.
d. Whenever a payment for fractional Rights or fractional shares is
to be made by the Rights Agent, the Corporation shall (i) promptly prepare and
deliver to the Rights Agent a certificate setting forth in reasonable detail the
facts related to such payments and the prices and/or formulas utilized in
calculating such payments, and (ii) provide sufficient monies to the Rights
Agent in the form of fully collected funds to make such payments. The Rights
Agent shall be fully protected in relying upon such a certificate and shall have
no duty with respect to, and shall not be deemed to have knowledge of any
payment for fractional Rights or fractional shares under any Section of this
Agreement relating to the payment of fractional Rights or fractional shares
unless and until the Rights Agent shall have received such a certificate and
sufficient monies.
Section 15. Rights of Action. All rights of action in respect of
this Agreement are vested in the respective holders of record of the Right
Certificates (and, prior to the Distribution Date, the holders of record of the
Common Stock); and any holder of record of any Right Certificate (or, prior to
the Distribution Date, of the Common Stock), without the consent of the Rights
Agent or of the holder of any other Right Certificate (or, prior to the
Distribution Date, of the Common Stock), may, in his own behalf and for his own
benefit, enforce, and may institute and maintain any suit, action or proceeding
against the Company or any other Person to enforce, or otherwise act in respect
of, his right to exercise the Rights evidenced by such Right
43
Certificate in the manner provided in such Right Certificate and in this
Agreement. Without limiting the foregoing or any remedies available to the
holders of Rights, it is specifically acknowledged that the holders of Rights
would not have an adequate remedy at law for any breach of this Agreement and,
accordingly, that they will be entitled to specific performance of the
obligations under, and injunctive relief against actual or threatened violations
of, the obligations of any Person subject to this Agreement.
Section 16. Agreement of Right Holders. Every holder of a Right by
accepting the same consents and agrees with the Company and the Rights Agent and
with every other holder of a Right that:
a. prior to the Distribution Date, the Rights will not be evidenced
by a Right Certificate and will be transferable only in connection with the
transfer of Common Stock;
b. after the Distribution Date, the Right Certificates will be
transferable only on the registry books of the Rights Agent if surrendered at
the principal office of the Rights Agent, duly endorsed or accompanied by a
proper instrument of transfer;
c. the Company and the Rights Agent may deem and treat the person in
whose name the Right Certificate (or, prior to the Distribution Date, the
associated Common Stock certificate) is registered as the absolute owner thereof
and of the Rights evidenced thereby (notwithstanding any notations of ownership
or writing on the Right Certificate or the associated Common Stock certificate
made by anyone other than the Company or the Rights Agent or the transfer agent
of the Common Stock) for all purposes whatsoever, and neither the Company nor
the Rights Agent shall be affected by any notice to the contrary; and
44
d. notwithstanding anything in this Agreement to the contrary,
neither the Company nor the Rights Agent shall have any liability to any holder
of a Right or a beneficial interest in a Right or other Person as a result of
its inability to perform any of its obligations under this Agreement by reason
of any preliminary or permanent injunction or other order, decree or ruling
issued by a court of competent jurisdiction or by a governmental, regulatory or
administrative agency or commission, or any statute, rule, regulation or
executive order promulgated or enacted by any governmental authority,
prohibiting or otherwise restraining performance of such obligation; provided,
however, the Company must use its reasonable efforts to have any such order,
decree or ruling lifted or otherwise overturned as soon as possible.
Section 17. Right Certificate Holder Not Deemed a Shareholder.
No holder of a Right or a Right Certificate, as such, shall be entitled to
vote, receive dividends in respect of or be deemed for any purpose to be the
holder of Common Stock or any other securities of the Company which may at any
time be issuable upon the exercise of the Rights, nor shall anything contained
herein or in any Right Certificate be construed to confer upon the holder of any
Right Certificate, as such, any of the rights of a shareholder of the Company or
any right to vote for the election of directors or upon any matter submitted to
shareholders at any meeting thereof, or to give or withhold consent to any
corporate action, or to receive notice of meetings or other actions affecting
shareholders (except as set forth in Section 25), or to receive dividends or
subscription rights in respect of any such stock or securities, or otherwise
until the Right or Rights evidenced by such Right Certificate shall have been
exercised in accordance with the provisions hereof.
45
Section 18. Concerning the Rights Agent.
a. The Company agrees to pay to the Rights Agent reasonable
compensation for all services rendered by it hereunder and, from time to time,
on demand of the Rights Agent, its reasonable expenses and counsel fees and
other disbursements incurred in the preparation, administration, delivery,
execution and amendment of this Rights Agreement and the exercise and
performance of its duties hereunder. The Company also agrees to indemnify the
Rights Agent for, and to hold it harmless against, any loss, liability, damage,
judgment, fine, penalty, claim, demand, settlement, cost or expense incurred
without gross negligence, bad faith or willful misconduct on the part of the
Rights Agent (each as determined by a final non-appealable order, judgment,
decree or ruling of a court of competent jurisdiction) for any action taken,
suffered or omitted to be done by the Rights Agent in connection with the
acceptance and administration of this Rights Agreement including, without
limitation, the cost and expenses of defending against any claim of liability.
The costs and expenses incurred by the Rights Agent in enforcing this right of
indemnification shall be paid by the Company unless it is determined by a final,
non-appealable order, judgment, decree or ruling of a court of competent
jurisdiction that the Rights Agent is not entitled to indemnification due to the
Rights Agent's gross negligence, bad faith or willful misconduct. The provisions
of this Section 18 and Section 20 below shall survive the termination of this
Agreement, the exercise or expiration of the Rights and the resignation or
removal of the Rights Agent.
b. The Rights Agent shall be authorized and protected by the
indemnity provided in this Section and shall incur no liability for or in
respect of any action taken, suffered or omitted by it in connection with its
acceptance and administration of this Rights Agreement in
46
reliance upon any Right Certificate, certificate for Common Stock or other
securities of the Company, instrument of assignment or transfer, power of
attorney, endorsement, affidavit, letter, notice, direction, consent,
certificate, statement or other paper or document believed by it to be genuine
and to be signed, executed and, where necessary, guaranteed, verified or
acknowledged, by the proper person or persons, or otherwise upon the advice of
counsel as set forth in Section 20. The Rights Agent shall not be deemed to have
knowledge of any event of which it was supposed to receive notice thereof
hereunder, and the Rights Agent shall be fully protected and shall incur no
liability for failing to take any action in connection therewith unless and
until it has received such notice in writing.
Section 19. Merger or Consolidation or Change of Name of Rights
Agent.
a. Any Person into which the Rights Agent or any successor Rights
Agent may be merged or with which it may be consolidated, or any Person
resulting from any merger or consolidation to which the Rights Agent or any
successor Rights Agent shall be a party, or any Person succeeding to the
business of the Rights Agent or any successor Rights Agent, shall be the
successor to the Rights Agent under this Rights Agreement without the execution
or filing of any paper or any further act on the part of any of the parties
hereto, provided that such Person would be eligible for appointment as a
successor Rights Agent under the provisions of Section 21 hereof. If at the time
such successor Rights Agent shall succeed to the agency created by this Rights
Agreement, any of the Right Certificates shall have been countersigned but not
delivered, any such successor Rights Agent may adopt the countersignature of the
predecessor Rights Agent and deliver such Right Certificates so countersigned;
and if at that time any of the Right Certificates shall not have been
countersigned, any successor Rights Agent may
47
countersign such Right Certificates either in the name of the predecessor Rights
Agent or in the name of the successor Rights Agent; and in all such cases such
Right Certificates shall have the full force provided in the Right Certificates
and in this Rights Agreement.
b. If at any time the name of the Rights Agent shall be changed and
at such time any of the Right Certificates shall have been countersigned but not
delivered, the Rights Agent may adopt the countersignature under its prior name
and deliver such Right Certificates so countersigned; and if at that time any of
the Right Certificates shall not have been countersigned, the Rights Agent may
countersign such Right Certificates either in its prior name or in its changed
name; and in all such cases such Right Certificates shall have the full force
provided in the Right Certificates and in this Rights Agreement.
Section 20. Duties of Rights Agent. The Rights Agent undertakes only
the duties and obligations imposed by this Rights Agreement (and no implied
duties and obligations) upon the following terms and conditions, by all of which
the Company and the holders of Right Certificates (or, if prior to the
Distribution Date, the holders of Common Stock), by their acceptance thereof,
shall be bound:
a. The Rights Agent may consult with legal counsel competent to
address such issues (who may be legal counsel for the Company or its own
in-house counsel), and the advice or opinion of such counsel shall be full and
complete authorization and protection to the Rights Agent, and the Rights Agent
shall incur no liability for, or in respect of any action taken, suffered or
omitted to be taken by it and in accordance with such advice or opinion.
b. Whenever in the performance of its duties under this Rights
Agreement the Rights Agent shall deem it necessary or desirable that any fact or
matter be proved or
48
established by the Company prior to taking, suffering or omitting to take any
action hereunder, such fact or matter (unless other evidence in respect thereof
be herein specifically prescribed) may be deemed to be conclusively proved and
established by a certificate signed by the Chairman of the Board, the Chief
Executive Officer, the President or any Vice President and by the Treasurer or
any Assistant Treasurer or the Secretary or any Assistant Secretary of the
Company and delivered to the Rights Agent; and such certificate shall be full
authorization and protection to the Rights Agent for any action taken, suffered
or omitted by it under the provisions of this Rights Agreement in reliance upon
such certificate.
c. The Rights Agent shall be liable hereunder only for its own gross
negligence, bad faith or willful misconduct (each as determined by a final,
non-appealable order, judgment, decree or ruling of a court of competent
jurisdiction). Anything to the contrary notwithstanding, in no event shall the
Rights Agent be liable for special, punitive, indirect, consequential or
incidental loss or damage of any kind whatsoever (including but not limited to
lost profits), even if the Rights Agent has been advised of the likelihood of
such loss or damage. Any liability of the Rights Agent under this Rights
Agreement will be limited to $500,000.
d. The Rights Agent shall not be liable for or by reason of any of
the statements of fact or recitals contained in this Rights Agreement or in the
Right Certificates (except its countersignature thereof) or be required to
verify the same, but all such statements and recitals are and shall be deemed to
have been made by the Company only.
e. The Rights Agent shall not be under any responsibility or have
any liability in respect of the validity of this Rights Agreement or the
execution and delivery hereof (except the due execution hereof by the Rights
Agent) or in respect of the validity or execution
49
of any Right Certificate (except its countersignature thereof); nor shall it be
responsible for any breach by the Company of any covenant or condition contained
in this Rights Agreement or in any Right Certificate; nor shall it be
responsible for any change in the exercisability of the Rights or any adjustment
required under the provisions hereof or responsible for the manner, method or
amount of any such change or adjustment or the ascertaining of the existence of
facts that would require any such change or adjustment (except with respect to
the exercise of Rights evidenced by Right Certificates after actual notice of
any such change or adjustment); nor shall it by any act hereunder be deemed to
make any representation or warranty as to the authorization or reservation of
any shares of Common Stock or other securities to be issued pursuant to this
Rights Agreement or any Right Certificate or as to whether any shares of Common
Stock or other securities will, when issued, be validly authorized and issued,
fully paid and nonassessable.
f. The Company agrees that it will perform, execute, acknowledge and
deliver or cause to be performed, executed, acknowledged and delivered all such
further and other acts, instruments and assurances as may reasonably be required
by the Rights Agent for the carrying out or performing by the Rights Agent of
the provisions of this Rights Agreement.
g. The Rights Agent is hereby authorized and directed to accept
instructions with respect to the performance of its duties hereunder from the
Chairman of the Board, the Chief Executive Officer, the President or any Vice
President or the Secretary or any Assistant Secretary or the Treasurer or any
Assistant Treasurer of the Company, and to apply to such officers for advice or
instructions in connection with its duties, and such instructions shall be full
authorization and protection to the Rights Agent, and the Rights Agent shall not
be liable for any
50
action taken, suffered or omitted to be taken by it in accordance with
instructions of any such officer.
h. The Rights Agent and any shareholder, affiliate, director,
officer or employee of the Rights Agent may buy, sell or deal in any of the
Rights or other securities of the Company or become pecuniarily interested in
any transaction in which the Company may be interested, or contract with or lend
money to the Company or otherwise act as fully and freely as though it were not
the Rights Agent under this Rights Agreement. Nothing herein shall preclude the
Rights Agent from acting in any other capacity for the Company or for any other
Person.
i. The Rights Agent may execute and exercise any of the rights or
powers hereby vested in it or perform any duty hereunder either itself or by or
through its attorneys or agents, and the Rights Agent shall not be answerable or
accountable for any act, default, neglect or misconduct of any such attorneys or
agents or for any loss to the Company resulting from any such act, default,
neglect or misconduct, absent gross negligence, bad faith or willful misconduct
(each as determined by a final, non-appealable order, judgment, decree or ruling
of a court of competent jurisdiction) in the selection and continued employment
thereof.
j. If, with respect to any Right Certificate surrendered to the
Rights Agent for exercise or transfer, the certificate contained in the form of
assignment or the form of election to purchase set forth on the reverse thereof,
as the case may be, has either not been completed or indicates an affirmative
response to clause 1 and/or 2 thereof, the Rights Agent shall not take any
further action with respect to such requested exercise of transfer without first
consulting with the Company.
51
k. No provision of this Agreement shall require the Rights Agent to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder or in the exercise of its rights if
it believes that repayment of such funds or adequate indemnification against
such risk or liability is not reasonably assured to it.
Section 21. Change of Rights Agent. The Rights Agent or any
successor Rights Agent may resign and be discharged from its duties under this
Rights Agreement upon 30 days' notice in writing mailed to the Company and to
each transfer agent of the Common Stock by registered or certified mail, and to
the holders of the Right Certificates by first-class mail. The Company may
remove the Rights Agent or any successor Rights Agent (with or without cause)
upon 30 days' notice in writing, mailed to the Rights Agent or successor Rights
Agent, as the case may be, and to each transfer agent of the Common Stock by
registered or certified mail, and to the holders of the Right Certificates by
first-class mail. If the Rights Agent shall resign or be removed or shall
otherwise become incapable of acting, the Company shall appoint a successor to
the Rights Agent. Notwithstanding the foregoing provisions of this Section 21,
in no event shall the resignation or removal of a Rights Agent be effective
until a successor Rights Agent shall have been appointed and have accepted such
appointment. If the Company shall fail to make such appointment within a period
of 30 days after such removal or after it has been notified in writing of such
resignation or incapacity by the resigning or incapacitated Rights Agent or by
the holder of a Right Certificate (who shall, with such notice, submit his Right
Certificate for inspection by the Company), then the incumbent Rights Agent or
the holder of record of any Right Certificate may apply to any court of
competent jurisdiction for the appointment of a new Rights Agent. Any successor
Rights Agent, whether appointed by the
52
Company or by such a court, shall be (a) a Person organized and doing business
under the laws of the United States or any State thereof, in good standing,
authorized to perform the duties provided herein of the Rights Agent and is
subject to supervision or examination by federal or state authority and which
has at the time of its appointment as Rights Agent a combined capital and
surplus of at least $100,000,000 or (b) an Affiliate of a Person described in
clause (a) of this sentence. After appointment, the successor Rights Agent shall
be vested with the same powers, rights, duties and responsibilities as if it had
been originally named as Rights Agent without further act or deed; but the
predecessor Rights Agent shall deliver and transfer to the successor Rights
Agent any property at the time held by it hereunder, and execute and deliver any
further assurance, conveyance, act or deed necessary for the purpose. Not later
than the effective date of any such appointment the Company shall file notice
thereof in writing with the predecessor Rights Agent and each transfer agent of
the Common Stock, and mail a notice thereof in writing to the registered holders
of the Right Certificates. Failure to give any notice provided for in this
Section 21, however, or any defect therein, shall not affect the legality or
validity of the resignation or removal of the Rights Agent or the appointment of
the successor Rights Agent, as the case may be.
Section 22. Issuance of New Right Certificates. Notwithstanding any
of the provisions of this Rights Agreement or of the Rights to the contrary, the
Company may, at its option, issue new Right Certificates evidencing Rights in
such form as may be approved by its Board of Directors to reflect any adjustment
or change in the Expiration Date, the Purchase Price per share and the number,
kind or class of shares of stock or other securities or property purchasable
under the Right Certificates made in accordance with the provisions of this
Rights
53
Agreement. In addition, in connection with the issuance or sale of shares of
Common Stock following the Distribution Date and prior to the redemption or
expiration of the Rights, the Company (a) shall, with respect to shares of
Common Stock so issued or sold pursuant to the exercise of stock options or
under any employee plan or arrangement, or upon the exercise, conversion or
exchange of securities hereinafter issued by the Company, and (b) may, in any
other case, if deemed necessary or appropriate by the Board of Directors of the
Company, issue Right Certificates representing the appropriate number of Rights
in connection with such issuance or sale; provided, however, that (i) no such
Right Certificate shall be issued if, and to the extent that, the Company shall
be advised by counsel that such issuance would create a significant risk of
material adverse tax consequences to the Company or the Person to whom such
Right Certificate would be issued, and (ii) no such Right Certificate shall be
issued, if, and to the extent that, appropriate adjustment shall otherwise have
been made in lieu of the issuance thereof.
Section 23. Redemption.
a. The Board of Directors of the Company may, at its option, at any
time prior to the earlier of (i) the Close of Business on the tenth day
following the Stock Acquisition Date (or if the Stock Acquisition Date shall
have occurred prior to the Record Date, the Close of Business on the tenth day
following the Record Date), or (ii) the Close of Business on the Final
Expiration Date, redeem all but not less than all of the then outstanding Rights
at a redemption price of $0.001 per Right, as such amount may be appropriately
adjusted to reflect any stock split, stock dividend or similar transaction
occurring after the date hereof (such redemption price being hereinafter
referred to as the "Redemption Price"). Notwithstanding anything contained in
54
this Rights Agreement to the contrary, the Rights shall not be exercisable after
the first occurrence of a Section 11(a)(ii) Event until such time as the
Company's right of redemption hereunder has expired. The Company may, at its
option, pay the Redemption Price in cash, shares of Common Stock (based on the
Current Market Price, as defined in Section 11(d), of the Common Stock at the
time of redemption) or any other form of consideration deemed appropriate by the
Board of Directors of the Company.
b. Immediately upon the action of the Board of Directors of the
Company ordering the redemption of the Rights, evidence of which shall have been
filed with the Rights Agent and without any further action and without any
notice, the right to exercise the Rights will terminate and the only right
thereafter of the holders of Rights shall be to receive the Redemption Price,
without any interest thereon, for each Right so held. The Company shall promptly
give public notice of any such redemption; provided, however, that the failure
to give, or any defect in, any such notice shall not affect the validity of such
redemption. Within 10 days after the action of the Board of Directors ordering
the redemption of the Rights, the Company shall give prompt written notice of
such redemption to the Rights Agent and the holders of the then outstanding
Rights by mailing such notice to all such holders at their last addresses as
they appear upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the transfer agent of the Common
Stock. Any notice which is mailed in the manner herein provided shall be deemed
given, whether or not the holder receives the notice. Each such notice of
redemption will state the method by which the payment of the Redemption Price
will be made. The failure to give notice required by this Section 23(b) or any
defect therein shall not affect the legality or validity of the action taken by
the Company. Neither the
55
Company nor any of its Affiliates or Associates may redeem, acquire or purchase
for value any Rights at any time in any manner other than that specifically set
forth in this Section 23 or in Section 24, and other than in connection with the
purchase of Common Stock prior to the Distribution Date.
Section 24. Exchange.
a. The Board of Directors of the Company may, at its option, at any
time after any Person becomes an Acquiring Person, exchange all or part of the
then outstanding and exercisable Rights (which shall not include Rights that
have become null and void pursuant to the provisions of Section 7(e)) for Common
Stock or Common Stock Equivalents at an exchange ratio of one share of Common
Stock or Common Stock Equivalent per Right, appropriately adjusted to reflect
any stock split, stock dividend or similar transaction occurring after the date
of this Agreement (such exchange ratio being hereinafter referred to as the
"Exchange Ratio"). Notwithstanding the foregoing, the Board of Directors shall
not be empowered to effect such exchange at any time after any Person (other
than an Exempt Person), together with all Affiliates and Associates of such
Person, becomes the Beneficial Owner of shares of Common Stock representing 50%
or more of the shares of the Common Stock then outstanding.
b. Immediately upon the action of the Board of Directors of the
Company ordering the exchange of any Rights pursuant to Section 24(a) and
without any further action and without any notice, the right to exercise such
Rights shall terminate and the only right thereafter of a holder of such Rights
shall be to receive that number of shares of Common Stock or Common Stock
Equivalents equal to the number of such Rights held by such holder multiplied by
the Exchange Ratio. The Company shall promptly give public notice of any such
exchange
56
(with prompt written notice thereof to the Rights Agent); provided, however,
that the failure to give, or any defect in, such notice shall not affect the
validity of such exchange. The Company shall promptly mail a notice of any such
exchange to all of the holders of such Rights at the last addresses of the
holders as they appear upon the registry books of the Rights Agent. Any notice
which is mailed in the manner herein provided shall be deemed given, whether or
not the holder receives the notice. Each such notice of exchange will state the
method by which the exchange of the shares of Common Stock or Common Stock
Equivalents for Rights will be effected and, in the event of any partial
exchange, the number and kind of Rights which will be exchanged. The failure to
give notice required by this Section 24 or any defect therein shall not affect
the legality or validity of any exchange hereunder. Any partial exchange shall
be effected pro rata based on the number of Rights being exchanged (other than
Rights which have become void pursuant to the provisions of Section 7(e)) held
by each holder of such Rights.
c. If there shall not be sufficient shares of Common Stock issued
but not outstanding or authorized but unissued to permit any exchange of Rights
as contemplated in accordance with this Section 24, the Company may, at its
option, take all such action as may be necessary to authorize additional shares
of Common Stock for issuance upon exchange of the Rights.
Section 25. Notice of Proposed Actions.
a. If the Company, after the Stock Acquisition Date, shall propose
(i) to effect any of the transactions referred to in Section 11(a)(i) or to pay
any dividend to the holders of record of its Common Stock payable in stock of
any class or to make any other distribution to the holders of record of its
Common Stock (other than a regular periodic cash dividend), or (ii) to
57
offer to the holders of record of its Common Stock options, warrants, or other
rights to subscribe for or to purchase shares of Common Stock (including any
security convertible into or exchangeable for Common Stock) or shares of stock
of any class or any other securities, options, warrants, convertible or
exchangeable securities or other rights, or (iii) to effect any reclassification
of its Common Stock or any recapitalization or reorganization of the Company, or
(iv) to effect any consolidation or merger with or into, or to effect any sale
or other transfer (or to permit one or more of its Subsidiaries to effect any
sale or other transfer), in one transaction or a series of related transactions
not in the ordinary course of the Company's business, of more than 30% of the
assets or earning power of the Company and its Subsidiaries (taken as a whole)
to, any other Person or Persons, or (v) to effect the liquidation, dissolution
or winding up of the Company, then, in each such case, the Company shall give to
the Rights Agent and to each holder of record of Rights, in accordance with
Section 26 hereof, notice of such proposed action, which shall specify the
record date for the purposes of such transaction referred to in Section
11(a)(i), or such dividend or distribution, or the date on which such
reclassification, recapitalization, reorganization, consolidation, merger, sale
or transfer of assets, liquidation, dissolution, or winding up is to take place
and the record date for determining participation therein by the holders of
record of Common Stock, if any such date is to be fixed, and such notice shall
be so given in the case of any action covered by clause (i) or (ii) above at
least 10 days prior to the record date for determining holders of record of the
Common Stock for purposes of such action, and in the case of any such other
action, at least 10 days prior to the date of the taking of such proposed action
or the date of participation therein by the holders of record of Common Stock,
whichever shall be the earlier. The failure to give notice required by this
58
Section 25 or any defect therein shall not affect the legality or validity of
the action taken by the Company or the vote upon any such action.
b. If any of the transactions referred to in Section 11(a)(ii) or
Section 13 of this Rights Agreement are proposed, then, in any such case, the
Company shall give to the Rights Agent and to each holder of Rights, in
accordance with Section 26 hereof, notice of the proposal of such transaction at
least 10 days prior to consummating such transaction, which notice shall specify
the proposed event and the consequences of the event to holders of Rights under
Section 11(a)(ii) or Section 13 hereof, as the case may be, and, upon
consummating such transaction, shall similarly give notice thereof to each
holder of Rights.
Section 26. Notices. Notices or demands authorized by this Rights
Agreement to be given or made by the Rights Agent or by the holder of record of
any Right Certificate or Right to or on behalf of the Company shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Rights Agent) or
by facsimile transmission as follows:
Synovus Financial Corp.
P.O. Box 120
Columbus, Georgia 31902
Attn: General Counsel
Facsimile No.:
with a copy to:
King & Spalding
191 Peachtree Street
Atlanta, Georgia 30303-1763
Attn: Alan J. Prince, Esq.
Facsimile No.:
59
Subject to the provisions of Section 21 hereof, any notice or demand authorized
by this Rights Agreement to be given or made by the Company or by the holder of
record of any Right Certificate or Right to or on the Rights Agent shall be
sufficiently given or made if sent by first-class mail, postage prepaid,
addressed (until another address is filed in writing with the Company) or by
facsimile transmission as follows:
Mellon Investor Services LLC
600 North Pearl Street, Suite 1010
Dallas, TX 75201
Attn: Relationship Manager
Facsimile No.:
with a copy to:
Mellon Investor Services LLC
85 Challenger Road
Ridgefield Park, New Jersey 07660
Attention: General Counsel
Facsimile No.: (201) 296-4004
Notices or demands authorized by this Rights Agreement to be given or made by
the Company or the Rights Agent to the holder of record of any Right Certificate
or Right shall be sufficiently given or made if sent by first-class mail,
postage prepaid, addressed to such holder at the address of such holder as it
appears upon the registry books of the Rights Agent or, prior to the
Distribution Date, on the registry books of the Transfer Agent.
Section 27. Supplements and Amendments. Prior to the Stock
Acquisition Date, the Company may in its sole and absolute discretion and the
Rights Agent shall, if the Company so directs but subject to the other
provisions of this Section, supplement or amend any provision of this Rights
Agreement without the approval of any holders of the Rights or the Common Stock.
From and after the Stock Acquisition Date, the Company may and the Rights
60
Agent shall, if the Company so directs, supplement or amend this Agreement
without the approval of any holders of Rights Certificates in order (i) to cure
any ambiguity, (ii) to correct or supplement any provision contained herein
which may be defective or inconsistent with any other provisions herein, or
(iii) to change or supplement the provisions hereunder in any manner which the
Company may deem necessary or desirable; provided, that no such supplement or
amendment shall adversely affect the interests of the holders of Rights (other
than any interest of an Acquiring Person or an Affiliate or Associate of an
Acquiring Person). Upon the delivery of a certificate from an appropriate
officer of the Company which states that the proposed supplement or amendment is
in compliance with the terms of this Section 27, and provided such supplement or
amendment does not change or increase the Rights Agent's rights, duties,
liabilities or obligations, the Rights Agent shall execute such supplement or
amendment. Prior to the Distribution Date, the interests of the holders of
Rights shall be deemed coincident with the interests of the holders of Common
Stock.
Section 28. Determinations and Actions by the Board. For all
purposes of this Agreement, any calculation of the number of shares of Common
Stock outstanding at any particular time, including for purposes of determining
the particular percentage of such outstanding shares of Common Stock of which
any Person is the Beneficial Owner, shall be made in accordance with the last
sentence of Rule 13d-3(d)(1)(i) under the Exchange Act as in effect on the date
of this Agreement. The Board of Directors of the Company shall have the
exclusive power and authority to administer this Agreement and to exercise all
rights and powers specifically granted to the Board or to the Company or as may
be necessary or advisable in the administration of this Agreement, including,
without limitation, the right and power to (i)
61
interpret the provisions of this Agreement, and (ii) make all determinations
deemed necessary or advisable for the administration of this Agreement
(including a determination to redeem or not redeem the Rights or to amend this
Agreement). All such actions, calculations, interpretations and determinations
(including, for purposes of clause (y) below, all omissions with respect to the
foregoing) which are done or made by the Board in good faith shall (x) be final,
conclusive and binding on the Company, the Rights Agent, the holders of the
Rights and all other parties, and (y) not subject the Board to any liability to
the holders of the Rights. The Rights Agent shall always be entitled to assume
the Company's Board of Directors acted in good faith and shall be fully
protected and incur no liability in reliance thereon.
Section 29. Successors. All of the covenants and provisions of this
Rights Agreement by or for the benefit of the Company or the Rights Agent shall
bind and inure to the benefit of their respective successors and assigns
hereunder.
Section 30. Benefits of this Rights Agreement. Nothing in this
Rights Agreement shall be construed to give to any Person other than the
Company, the Rights Agent and the registered holders of the Right Certificates
(and, prior to the Distribution Date, the Common Stock) any legal or equitable
right, remedy or claim under this Rights Agreement; but this Rights Agreement
shall be for the sole and exclusive benefit of the Company, the Rights Agent and
the holders of record of the Right Certificates (and, prior to the Distribution
Date, the Common Stock).
Section 31. Governing Law. This Rights Agreement and each Right
Certificate issued hereunder shall be deemed to be a contract made under the
laws of the State of Georgia and for all purposes shall be governed by and
construed in accordance with the laws of
62
such state applicable to contracts to be made and performed entirely within such
state; provided, however, that all provisions regarding the rights, duties and
obligations of the Rights Agent shall be governed by and construed in accordance
with the laws of the State of New York applicable to contracts made and to be
performed entirely within such State.
Section 32. Counterparts. This Rights Agreement may be executed in
any number of counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall together constitute
but one and the same instrument.
Section 33. Descriptive Headings. Descriptive headings of the
several sections of this Rights Agreement are inserted for convenience only and
shall not control or affect the meaning or construction of any of the provisions
hereof.
Section 34. Severability. If any term, provision, covenant or
restriction of this Rights Agreement is held by a court of competent
jurisdiction or other authority to be invalid, illegal, void or unenforceable,
the remainder of the terms, provisions, covenants and restrictions of this
Rights Agreement shall remain in full force and effect and shall in no way be
affected, impaired or invalidated.
63
IN WITNESS WHEREOF, the parties hereto have caused this Rights
Agreement to be duly executed, all as of the day and year first above written.
Attest: SYNOVUS FINANCIAL CORP.
By: /s/ Kathleen Moates By: /s/ Patrick A. Reynolds
------------------------------------ ------------------------------
Name: Kathleen Moates Name: Patrick A. Reynolds
Title: Senior Vice President and Title: Senior Vice President
Senior Deputy General Counsel
Attest: MELLON INVESTOR SERVICES LLC
By: /s/ Barbara J. Robbins By: /s/ Timothy D. Oliver
------------------------------------ ------------------------------
Name: Barbara J. Robbins Name: Timothy D. Oliver
Title: Vice President & Title: Vice President
Regional Client Service Director
64
EXHIBIT A
[Form of Right Certificate]
Certificate No. W- ________ Rights
NOT EXERCISABLE AFTER MAY 4, 2009 OR UNDER CERTAIN CIRCUMSTANCES EARLIER.
THE RIGHTS ARE SUBJECT TO REDEMPTION, AT THE OPTION OF THE COMPANY, AT
$0.001 PER RIGHT ON THE TERMS SET FORTH IN THE RIGHTS AGREEMENT. IN THE
EVENT THAT THE RIGHTS REPRESENTED BY THIS CERTIFICATE ARE ISSUED TO A
PERSON WHO IS AN ACQUIRING PERSON OR AN ASSOCIATE OR AFFILIATE OF AN
ACQUIRING PERSON OR A TRANSFEREE OF THE RIGHTS PREVIOUSLY OWNED BY SUCH
PERSONS, THIS RIGHT CERTIFICATE AND THE RIGHTS REPRESENTED HEREBY WILL
BECOME NULL AND VOID.
Right Certificate
Synovus Financial Corp.
This certifies that _________________________ or registered assigns,
is the registered owner of the number of Rights set forth above, each of which
entitles the owner thereof, subject to the terms, provisions and conditions of
the Rights Agreement dated as of April 27, 1999 ("Rights Agreement") between
Synovus Financial Corp., a Georgia corporation ("Company"), and Mellon Investor
Services LLC, a New Jersey limited liability company ("Rights Agent"), to
purchase from the Company at any time after the Distribution Date (as such term
is defined in the Rights Agreement) and prior to 5:00 P.M. (Eastern Standard
Time) on May 4, 2009 at the principal office of the Rights Agent, or its
successors as Rights Agent, one fully paid and nonassessable share of Common
Stock, par value $1.00 per share ("Common Stock"), of the Company at a purchase
price of $225.00 as the same may from time to time be adjusted in
accordance with the Rights Agreement ("Purchase Price"), upon presentation and
surrender of this Right Certificate with the Form of Election to Purchase duly
executed.
As provided in the Rights Agreement, the Purchase Price and the
number of shares of Common Stock which may be purchased upon the exercise of the
Rights evidenced by this Right Certificate are subject to modification and
adjustment upon the happening of certain events and, upon the happening of
certain events, securities other than shares of Common Stock, or other property,
may be acquired upon exercise of the Rights evidenced by this Right Certificate,
as provided by the Rights Agreement.
This Right Certificate is subject to all of the terms, provisions
and conditions of the Rights Agreement, which terms, provisions and conditions
are incorporated herein by reference and made a part hereof and to which Rights
Agreement reference is hereby made for a full description of the rights,
limitations of rights, obligations, duties and immunities of the Rights Agent,
the Company and the holders of record of the Right Certificates. Copies of the
Rights Agreement are on file at the principal executive office of the Company.
This Right Certificate, with or without other Right Certificates,
upon surrender at the principal office of the Rights Agent, may be exchanged for
another Right Certificate or Right Certificates of like tenor and date
evidencing Rights entitling the holder of record to purchase a like aggregate
number of shares of Common Stock as the Rights evidenced by the Right
Certificate or Right Certificates surrendered shall have entitled such holder to
purchase. If this Right Certificate shall be exercised in part, the holder shall
be entitled to receive upon surrender hereof, another Right Certificate or Right
Certificates for the number of whole Rights not exercised.
Subject to the provisions of the Rights Agreement, the Rights
evidenced by this Certificate (i) may be redeemed by the Company at its option
at a redemption price of $0.001 per Right or (ii) may be exchanged in whole or
in part for shares of Common Stock or common stock equivalents.
No fractional shares of Common Stock shall be issued upon the
exercise of any Right or Rights evidenced hereby, and in lieu thereof, as
provided in the Rights Agreement, fractions of shares of Common Stock shall
receive an amount in cash equal to the same fraction of the then current market
value of a share of Common Stock.
No holder of this Right Certificate shall be entitled to vote or
receive dividends or be deemed for any purpose the holder of Common Stock or of
any other securities of the Company which may at any time be issuable on the
exercise hereof, nor shall anything contained in the Rights Agreement or herein
be construed to confer upon the holder hereof, as such, any of the rights of a
shareholder of the Company or any right to vote for the election of directors,
or upon any matter submitted to shareholders at any meeting thereof, or to give
or withhold consent to any corporate action or to receive notice of meetings
(except as provided in the Rights Agreement) or other actions affecting
shareholders or to receive dividends or subscription rights, or otherwise, until
the Right or Rights evidenced by this Right Certificate shall have been
exercised as provided in the Rights Agreement.
This Right Certificate shall not be valid or obligatory for any
purpose until it shall have been countersigned by the Rights Agent.
WITNESS the facsimile signature of the proper officers of the
Company and its corporate seal, dated as of ________________, _________.
ATTEST: SYNOVUS FINANCIAL CORP.
By: ________________________________
Name: Patrick A. Reynolds
Title: Senior Vice President
Countersigned
Mellon Investor Services LLC, Rights Agent
By: __________________________
Name: Timothy D. Oliver
Title: Vice President
[Form of Reverse Side of Right Certificate]
FORM OF ASSIGNMENT
(To be executed by the registered holder if such holder
desires to transfer the Right Certificate.)
FOR VALUE RECEIVED ___________________ hereby sells, assigns and
transfers unto _________________________________________________________________
(Please print name and address of transferee)
________________________________________________________________________________
___________________ Rights evidenced by this Right Certificate, together with
all right, title and interest therein, and does hereby irrevocably constitute
and appoint ___________ Attorney to transfer the within Right Certificate on the
books of the within-named Company, with full power of substitution.
Dated: ___________ __, ____
Signature
Signature Guaranteed:
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are
not being sold, assigned and transferred by or on behalf of a Person who is or
was an Acquiring Person or an Affiliate or Associate of any such Acquiring
Person (as such terms are defined pursuant to the Rights Agreement); and
(2) after due inquiry and to the best knowledge of the undersigned,
it [ ] did [ ] did not acquire the Rights evidenced by this Right Certificate
from any Person who is or was an Acquiring Person or an Affiliate or Associate
of an Acquiring Person or any transferee of such Persons.
Dated: ____________ __, _____
Signature
NOTICE
The signature to the foregoing Assignment must correspond to the name as written
upon the face of this Right Certificate in every particular, without alteration
or enlargement or any change whatsoever.
FORM OF ELECTION TO PURCHASE
(To be executed if registered holder desires to Exercise the Right Certificate.)
To: Synovus Financial Corp.
The undersigned hereby irrevocably elects to exercise ______________
Rights represented by this Right Certificate to purchase the shares of Common
Stock issuable upon the exercise of such Rights and requests that certificates
for such share(s) be issued in the name:
__________________________________________________________________
(Please print name and address)
__________________________________________________________________
(Please insert social security or other identifying number)
If such number of Rights shall not be all the Rights evidenced by this Right
Certificate, a new Right Certificate for the balance remaining of such Rights
shall be registered in the name of and delivered to:
__________________________________________________________________
(Please print name and address)
__________________________________________________________________
(Please insert social security or other identifying number)
Dated: ___________________, ______
Signature
(Signature must conform in all respects to
name of holder as specified on the face of
this Right Certificate)
Signature Guaranteed:
-3-
Signatures must be guaranteed by a member firm of a registered national
securities exchange, a member of the National Association of Securities Dealers,
Inc., or a commercial bank or trust company having an office or correspondent in
the United States.
Certificate
The undersigned hereby certifies by checking the appropriate boxes
that:
(1) the Rights evidenced by this Right Certificate [ ] are [ ] are
not being exercised by or on behalf of a Person who is or was an Acquiring
Person or an Affiliate or Associate of any such Acquiring Person (as such terms
are defined pursuant to the Rights Agreement);
(2) after due inquiry and to the best knowledge of the undersigned,
it [ ] did [ ] did not acquire the Rights evidenced by this Right Certificate
from any Person who is or was an Acquiring Person or an Affiliate or Associate
of an Acquiring Person or any transferee of such Persons.
Dated: ____________________, ______
Signature
-4-
EXHIBIT B
SYNOVUS FINANCIAL CORP.
SUMMARY OF RIGHTS TO PURCHASE
COMMON STOCK
On April 27, 1999, the Board of Directors of Synovus Financial Corp. (the
"Company") adopted a Shareholder Rights Plan pursuant to a Rights Agreement (the
"Rights Agreement") and authorized and declared a dividend of one Common Stock
Purchase Right (a "Right") with respect to each outstanding share of common
stock, par value $1.00 per share ("Common Stock"), of the Company. The dividend
is payable on May 4, 1999 to the shareholders of record on that date (the
"Record Date"), and to each holder of Common Stock issued thereafter until the
Distribution Date (as hereinafter defined) or the expiration or earlier
redemption of the Rights. Except as set forth below, each Right entitles the
registered holder thereof to purchase from the Company at any time after the
Distribution Date one share of Common Stock at a price of $225.00 per share,
subject to adjustment (the "Purchase Price"). The description and terms of the
Rights are set forth in the Rights Agreement.
Initially, the Rights will attach to all certificates of outstanding
shares of Common Stock, and no separate Right Certificates (as hereinafter
defined) will be distributed. The Rights will become exercisable and separate
from the shares of Common Stock upon the earlier to occur of (i) ten days after
the date (the "Stock Acquisition Date") of a public announcement that a person
or group of affiliated or associated persons has acquired beneficial ownership
of 15% or more of the outstanding Common Stock (such person or group being
hereinafter referred to as an "Acquiring Person"(1); or (ii) ten business days
(or such later date as the Board may determine)
- ----------------
(1) Each of the following persons will not be deemed to be an Acquiring Person
even if they have acquired, or obtained the right to acquire, beneficial
ownership of 15% or more of the outstanding Common Stock: (i) the Company,
any subsidiary of the Company, or any employee benefit plan of the Company
or of any subsidiary of the Company; (ii) any shareholder who is a
descendant of D. Abbott Turner (the "Turner Family"), any shareholder who
is affiliated or associated with the Turner Family and any person who
would otherwise become an Acquiring Person as a result of the receipt of
Common Stock or a beneficial interest in Common Stock from one or more
members of the Turner Family by way of gift, devise, descent or
distribution, but not by way of sale, unless any such person, together
with his affiliates and associates, becomes the beneficial owner of more
than 30% of the outstanding shares of Common Stock; (iii) any person who
would otherwise become an Acquiring Person solely by virtue of a reduction
in the number of outstanding shares of Common Stock unless and until such
person shall become the beneficial owner of any additional shares of
Common Stock; and (iv) any person who as of the Record Date was the
beneficial owner of 15% or more of the outstanding Common Stock unless and
until such person shall become the beneficial owner of any additional
shares of Common Stock.
following the commencement of, or announcement of an intention to make, a tender
offer or exchange offer, the consummation of which would result in a person or
group becoming the beneficial owner of 15% or more of the outstanding Common
Stock (the earlier of such dates in clauses (i) and (ii) being called the
"Distribution Date"). Shares of Common Stock beneficially owned by the Company
or any subsidiary of the Company will not be considered outstanding for purposes
of calculating the percentage ownership of any person.
Until the Distribution Date (or earlier redemption or expiration of the
Rights), (i) the Rights will be evidenced by the certificates for the Common
Stock, (ii) the Rights will be transferred with, and only with, the shares of
Common Stock, (iii) new Common Stock certificates issued after the Record Date
upon transfer or new issuance of shares of Common Stock will contain a notation
incorporating the Rights Agreement by reference, and (iv) the surrender for
transfer of any certificates for shares of Common Stock outstanding as of the
Record Date, even without such notation, will also constitute the transfer of
the Rights associated with the shares of Common Stock represented by such
certificate. As soon as practicable following the Distribution Date, separate
certificates evidencing the Rights (collectively, the "Right Certificates") will
be mailed to holders of record of the shares of Common Stock as of the close of
business on the Distribution Date, and such separate Right Certificates alone
will evidence the Rights. The Rights are not exercisable until the Distribution
Date. The Rights will expire at the close of business on May 5, 2009, unless
earlier redeemed by the Company as described below.
If any person becomes an Acquiring Person, each holder of a Right will
thereafter have the right (the "Flip-In Right") to receive upon payment of the
Purchase Price, shares of Common Stock (or in certain circumstances, cash,
property or other securities of the Company) having a value equal to two times
the Purchase Price of the Right. Notwithstanding the foregoing, all Rights that
are, or were, beneficially owned by an Acquiring Person or any affiliate or
associate thereof will be null and void and not exercisable.
If, at any time on or after the Stock Acquisition Date, (i) the Company is
acquired in a merger or other business combination transaction in which the
holders of all of the outstanding shares of Common Stock immediately prior to
the consummation of the transaction are not the holders of all of the surviving
corporation's voting power, or (ii) more than 30% of the Company's assets, cash
flow or earning power is sold or transferred other than in the ordinary course
of the Company's business, then each holder of a Right (except Rights which have
previously been voided as set forth above) shall thereafter have the right (the
"Flip-Over Right") to receive, in lieu of shares of Common Stock and upon
exercise and payment of the Purchase Price, common shares of the acquiring
company having a value equal to two times the Purchase Price. If a transaction
would otherwise result in a holder's having a Flip-In as well as a Flip-Over
Right, then only the Flip-Over Right will be exercisable. If a transaction
results in a holder's having a Flip-Over Right subsequent to a transaction
resulting in a holder's having a Flip-In Right, a holder will have Flip-Over
Rights only to the extent such holder's Flip-In Rights have not been exercised.
-6-
The Purchase Price payable, and the number of shares of Common Stock or
other securities or property issuable, upon exercise of the Rights are subject
to adjustment from time to time to prevent dilution (i) in the event of a stock
dividend on, or a subdivision, combination or reclassification of, the Common
Stock, (ii) upon the grant to holders of the Common Stock of certain rights or
warrants to subscribe for Common Stock or convertible securities at less than
the current market price of the Common Stock or (iii) upon the distribution to
holders of the Common Stock of evidences of indebtedness or assets (excluding
dividends payable in Common Stock) or of subscription rights or warrants (other
than those referred to above). However, no adjustment in the Purchase Price will
be required until cumulative adjustments require an adjustment of at least 1%.
The number of outstanding Rights and the number of shares of Common Stock
issuable upon exercise of each Right are also subject to adjustment in the event
of a stock split of the Common Stock or a stock dividend on the Common Stock
payable in Common Stock or subdivisions, consolidations or combinations of the
Common Stock occurring, in any such case, prior to the Distribution Date.
At any time after a Person becomes an Acquiring Person and before the
acquisition by a Person of 50% or more of the outstanding Common Stock of the
Company, the Board of Directors may, at its option, issue Common Stock or common
stock equivalents of the Company in mandatory redemption of, or in exchange for,
all or part of the then outstanding exercisable Rights (other than Rights owned
by such Acquiring Person which would become null and void) at an exchange ratio
of one share of Common Stock, or common stock equivalents equal to one share of
Common Stock, per Right, subject to adjustment.
To the extent that, after the triggering of Flip-In Rights, insufficient
shares of Common Stock are available for the exercise in full of the Rights,
holders of Rights will receive upon exercise shares of Common Stock to the
extent available and then cash, property or other securities of the Company, in
proportions determined by the Company, so that the aggregate value received is
equal to twice the Purchase Price.
The Company is not required to issue fractional shares of Common Stock and
in lieu thereof, a payment in cash will be made to the holder of such Rights
equal to the same fraction of the current value of share of Common Stock.
Following the triggering of the Flip-In Rights, the Company will not be required
to issue fractional shares of Common Stock upon exercise of the Rights and, in
lieu thereof, a payment in cash will be made to the holder of such Rights equal
to the same fraction of the current market value of a share of Common Stock.
At any time prior to the Distribution Date, the Board of Directors of the
Company may redeem all, but not less than all, of the then outstanding Rights at
a price of $.001 per Right (the "Redemption Price"). The redemption of the
Rights may be made effective at such time, on such basis and with such
conditions as the Board of Directors in its sole discretion may establish.
Immediately upon the action of the Board of Directors ordering redemption of the
Rights, the right to exercise the Rights will terminate and the only right of
the holders of Rights will be to receive the Redemption Price.
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Until a Right is exercised, the holder thereof, as such, will have no
rights as a shareholder of the Company, including, without limitation, the right
to vote or to receive dividends.
The issuance of the Rights is not taxable to the Company or to
shareholders under presently existing federal income tax law, and will not
change the way in which shareholders can presently trade the Company's shares of
Common Stock. If the Rights should become exercisable, shareholders, depending
on then existing circumstances, may recognize taxable income.
Prior to the Stock Acquisition Date, the Rights Agreement generally may be
amended by the Company without the consent of the holders of the Rights or the
Common Stock. On or after the Stock Acquisition Date, the Company may amend the
Rights Agreement only to (i) cure any ambiguity, (ii) correct or supplement any
provision which may be defective or inconsistent with the other provisions of
the Rights Agreement, or (iii) change or supplement the Rights Agreement in any
other manner which the Company may deem necessary or desirable, provided that no
amendment shall adversely affect the interests of the holders of Rights (other
than any interest of an Acquiring Person or an affiliate or associate of an
Acquiring Person).
The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire the Company
on terms not approved by the Company's Board of Directors. Accordingly, the
existence of the Rights may deter certain acquirors from making takeover
proposals or tender offers. However, the Rights Agreement helps ensure that the
Company's shareholders receive fair and equal treatment in the event of any
proposed takeover of the Company. The Rights should not interfere with any
merger or other business combination approved by the Board of Directors because
the Rights may be redeemed by the Company at the Redemption Price prior to the
time that a person or group has acquired beneficial ownership of 15% or more of
the outstanding Common Stock. The adoption of the Rights Agreement is not in
response to any specific takeover threat or proposal, but is a precaution taken
to protect the rights of the Company's shareholders.
A copy of the Rights Agreement has been filed with the Securities and
Exchange Commission as an Exhibit to the Company's Registration Statement on
Form 8-A with respect to the Rights filed with the Securities and Exchange
Commission. A copy of the Rights Agreement is available free of charge from the
Company. This summary description of the Rights does not purport to be complete
and is qualified in its entirety by reference to the Rights Agreement, which is
incorporated in this summary description by reference.
DISCLOSURE REGARDING FORWARD-LOOKING STATEMENTS
Certain matters discussed herein may constitute Forward-looking Statements
within the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities Act of 1934, as amended, each as amended by the
Private Securities Litigation Reform Act of 1995. Those statements include
statements regarding the intent, belief or current
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expectations of the Company and members of its management team as well as the
assumptions on which such statements are based. Any such Forward-looking
Statements are not guarantees of future performance and the Company's actual
results could differ materially from those set forth in such Forward-looking
Statements. Factors currently known to management that could cause actual
results to differ materially from those set forth in such Forward-looking
Statements include risks detailed from time to time in the Company's filings
with the Securities and Exchange Commission, including Quarterly Reports on Form
10-Q, Current Reports on Form 8-K and Annual Reports on Form 10-K. The Company
undertakes no obligation to update or revise Forward-looking Statements to
reflect changed assumptions, the occurrence of unanticipated events or changes
to future operating results over time.
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